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Contemporary Geopolitics and Digital Representations of Space / Sead Turčalo, Ado Kulović
The Effects of Post-conflict Constitutional Designs: the “Ohrid Framework Agreement” and the Macedonian Constitution / Stefan Andonovski
The EU Stabilisation and Association Agreement for the Western Balkans: Between Challenges and Opportunities / Gazmend Qorraj, Gezim Jusufi
Right of Access to Supreme Courts in Light of the Guarantees under Article 6 § 1 of the Convention on Human Rights and Fundamental Freedoms (Civil Aspect) / Nikolina Katić, Matea Bašić, Morana Briški
Legal Technology for Law Firms: Determining Roadmaps for Innovation / Tanel Kerikmäe, Thomas Hoffmann, Archil Chochia
An Analysis of Public Debt Servicing in Zambia: Trends, Reforms and Challenges / Talknice Saungweme, Nicholas M. Odhiambo
XXIV (81) - 2018 ISSN 1848-5782
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Editor in Chief:
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Department for International Economic and Political Relations (IRMO)
Paško Bilić, PhDResearch Assistant, Department for Culture and Communication (IRMO)
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ContentsISSN 1848-5782 UDC 327(497.5)
Contemporary Geopolitics and Digital Representations of Space / Sead Turčalo, Ado Kulović............................................................7
The Effects of Post-conflict Constitutional Designs: the “Ohrid Framework Agreement” and the Macedonian Constitution / Stefan Andonovski...................................................................23
The EU Stabilisation and Association Agreement for the Western Balkans: Between Challenges and Opportunities / Gazmend Qorraj, Gezim Jusufi............................................51
Right of Access to Supreme Courts in Light of the Guarantees under Article 6 § 1 of the Convention on Human Rights and Fundamental Freedoms (Civil Aspect) / Nikolina Katić, Matea Bašić, Morana Briški.....................................................................................................69
Legal Technology for Law Firms: Determining Roadmaps for Innovation / Tanel Kerikmäe, Thomas Hoffmann, Archil Chochia.............91
An Analysis of Public Debt Servicing in Zambia: Trends, Reforms and Challenges / Talknice Saungweme, Nicholas M. Odhiambo......................................................................................................113
Book Reviews
Resilience in the Western Balkans / Nani Klepo..........................................138
General Theory of International Law, Volume 1, American Classics in International Law / Qerim Qerimi............................143
Isolate or Engage: Adversarial States, U.S. Foreign Policy, and Public Diplomacy / Kadir Ayhan..........................................................146
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The Croatian International Relations Review (CIRR) is an interdisciplinary academic journal published in English since 1995 and focuses on political science, sociology, law and economics. Each issue includes scholarly, double-blind peer reviewed articles, and book reviews. CIRR is a member of COPE – Committee on Publication Ethics – and is published electronically by the Institute for Development and International Relations (IRMO) in Zagreb. The journal is supported by the Ministry of Science, Education and Sports of the Republic of Croatia and is published in collaboration with De Gruyter Open, the world´s second largest publisher of Open Access academic content. CIRR is indexed by 40 scholarly databases, including ESCI, Scopus, Erih Plus, EconLit and Doaj. Articles reflect the views of their authors only.
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Croatian International Relations Review - CIRRXXIV (81) 2018, 7-22ISSN 1848-5782 UDC 911.3:32: 528.8(100)DOI 10.2478/cirr-2018-0001
Contemporary Geopolitics and Digital Representations of Space
Sead Turčalo, Ado Kulović
Abstract
This research is premised on two theoretical constructs: that maps do not objectively depict space and that traditional cartography produces a geopolitical narrative. The research aim is to investigate geopolitical influence in modern, digital representations of space, and vice versa. This paper is divided into three parts: In the first, the digital representation of space is introduced and explained, and two widely acknowledged digital cartographic services are established as the empirical foundation of the research – Google (Google Maps and Google Earth), designed by cartographic and geo-data professionals, and OpenStreetMap, built through crowdsourcing. In the second part, the geopolitical features of traditional cartography are discussed in the context of digital mapping, including ethnocentricity and hierarchical representations of space, similarities to geopolitische karte, and “minor geopolitics.” The final part asks and answers a key question about geopolitical subjectivity: “Who benefits from the geopolitical narratives in digital representations of space?”
KEY WORDS:
geopolitics, Geoweb, cartography, Google Maps and Google Earth, OpenStreetMap (OSM)
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Introduction
Since the 1890s, the term ‘geopolitics’ has “provoked personal passion and intellectual outbursts” (Dodds and Atkinson 2003: xiv). Yet to this day, the term lacks a generally understood meaning. Nevertheless, nearly all authors accept that the most significant ontological element of geopolitics is space. Cartography, the main means by which space is depicted, is thus inherently linked to geopolitics. However, maps are not objective representations of space. As Yves Lacoste has noted, the map is a powerful tool, which abstracts concrete reality based on practical concerns and “facilitates domination and control” (Dodds 2007: 120). Hence, it is safe to assert that geopolitical narratives exist within cartography.
Modern, computer-aided cartography is introducing previously unknown ways to represent space and is offering greater accessibility and new roles for users of digital maps. At the same time, geopolitical theory and practice have also evolved. It is in the context of these multiple paradigm changes that we saw an opportunity for scientific inquiry and tasked ourselves with examining geopolitical narratives within modern depictions of space. In other words, we sought to understand the connection between contemporary geopolitics and representations of space on digital platforms.
This was, as it turned out, a difficult undertaking. The research process was burdened by the lack of consensus on a definition of geopolitics and an absence of any previous scientific research on this topic. Thus, we had to develop our own research and methodological approaches. To this end, we identified three central research questions: Firstly, what is a digital representation of space and what are its characteristics? Secondly, what are the geopolitical properties of a digital representation of space? And thirdly, who benefits from the geopolitical narratives reflected in digital representations of space?
In line with this methodological approach, this paper is divided into three parts. The first discusses the development of computer-aided cartography services and introduces the concept of the “Geoweb.” The second examines the geopolitical properties of (mostly) traditional maps,
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but in the digital context, to determine how the geopolitical narratives of conventional cartography influence the development of digital mapping, and how “new spatial media” is changing geopolitical practice and theory. The final part deals with the geopolitical narrative of the Geoweb and tries to ascertain which geopolitical agents it benefits.
Digital representations of space: the Geoweb
The digital representation of space relies on the descriptive display of space and the technology that facilitates it. Crampton calls it “new spatial media” (2009a: 92) but acknowledges that a bewildering variety of terms have been applied to the topic1. Citing Wood (2003), he notes that, “ironically ‘cartography’ does not seem to be” among them (2009a: 91). We have concluded that the term Geoweb is generally accepted by most authors. In introducing the term here, we feel it is helpful to explain the origins of the two technologies without which the Geoweb would not exist: the Geographical Information System (GIS) and remote-sensing space technology.
Digital cartography is not as new as one may assume. Farman explains that its conception dates back to the 1950s, “often in conjunction with the mapping of census data and land use,” and that the first ever GIS was the “Canada Geographic Information System,” launched in 1964 (2010: 870). In 1982, an open source variant of GIS (GRASS) was conceived (Crampton 2009a: 94); and by the end of the 1980s, computer-aided cartography and GIS were common within the cartographic community. Indeed, in the late 1980s, Harley commented that the embrace of computer-aided technology was causing map makers to become “more strident” and concluded that a “culture of technics” was widespread (1989: 2).
Remote-sensing space technology was, unsurprisingly, a cold war-era innovation. It began with three American imaging satellite programmes
1 “...geospatial web or geoweb (Scharl and Tochtermann, 2007), neogeography (Turner, 2006), locative media (Rheingold, 2002), DigiPlace (Zook and Graham, 2007a), spatial crowdsourcing or geocollaboration (Hopfer and MacEachren, 2007) and map hacking (Erle et al., 2005)” (Crampton 2009a: 91).
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(dubbed Corona, Argon, and Lanyard), which were active from 1959 to 1972 and were operated by the US Central Intelligence Agency. These ‘photographic surveillance satellites’ gathered data to assess Soviet long-range bomber development. But this “worldwide photographic coverage was also used to produce maps and charts for the Department of Defense and other US government mapping programs” (Program Corona, Mission and Spacecraft Library – NASA JPL)2. In 1972, NASA initiated “Landsat” – the first civilian remote-sensing satellite programme. A private firm, Earth Observation Satellite Company (EOSAT), began operating Landsat in 1985; but one year later, the programme’s commercial monopoly on Earth imaging ended after the French SPOT satellite was launched. In 1992, NASA took back Landsat for itself, though its prominence has been diminished by the emergence in this field of other governments as well as private companies (Lee 2010: 918).
The first popular online map service was MapQuest, launched in 1996 (Farman 2010: 870; Parsons 2013: 182). Parsons asserts that, although similar online services existed (e.g. Xerox Parc View, started in 1993), MapQuest gained attention through the service it offered to non-academic web users. The next step in online map development, he explains, were consumer-focused services such as store finders (2013: 182).
In 2004, the most successful crowdsourced mapping project – OpenStreetMap (OSM) – was introduced, offering the facility of a free, open-source global map (Caquard 2011: 137). According to Gerlach, “OpenStreetMap is at once a technology, a set of performances and a series of communities that allow users to create and alter maps, based on wiki protocols” (2015: 276). This represents so-called citizen cartography or “Volunteered Geographic Information” (VGI) (Goodchild 2007 by Parsons 2013: 182). As of August 2017, OSM had some 4.3 million registered users (Stats OpenStreetMap wiki). The major share of these are male and more than half have formal training in GIS (Budhathoki 2010 by Gerlach 2015: 276).
The most-accessed new spatial media are Google’s Maps and Earth services. Started in February 2005, Google Maps initially utilised
2 The Program’s existence was not revealed until 1995 by President Clinton’s Executive Order (Program Corona, Mission and Spacecraft Library – NASA JPL).
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MapQuest’s service to support local searches. Today, it relies on the remote-sensing images that are the core of Google Earth (Parsons 2013: 182). It is important to note that, contrary to popular belief, Google does not own any satellites. It obtains images from third-party providers such as the aforementioned Landsat.
The Geoweb is short for “Geospatial Web,” which Offen described as a combination of applications and new skills that search for georeference information throughout the web (2012: 567). According to Crampton, free and open source software (FOSS) is a significant philosophical element of the Geoweb; and one which divides new spatial media and GIS into two camps (2009a: 93, 97) – on the one hand, the FOSS Geoweb, and on the other, efforts to accredit mapping expertise through professional certification and “bodies of knowledge” (DiBiase et al. 2006; Crampton 2009a: 97). This paper focuses on OSM and Google, the most prominent Geoweb services. The former is an example of the FOSS Geoweb and the latter of the institutionalized, “professional” Geoweb. On these platforms, we will analyse the connection between digital representations of space and contemporary geopolitical practice and theory. We are, therefore, viewing these platforms as the empirical foundation for this paper’s theoretical argumentation.
Geopolitical properties
In Agnew’s discussion of visualizing global space, he explains that two perspectives “emerged at the outset of the European Age of Discovery;” one of which positions the world as “an ordered, structured whole,” that is separate from and outside of the viewer (2003: 15). Given that the distance between a viewer of a global map and the world itself can be observed as a geopolitical manifestation, and since the Geoweb is, in ontological terms, the “world-as-a-picture,” the geopolitical properties of this map must be examined. Harley explains that there are two sets of cartographic properties, related to their cultural production and their technical production (Harley 1989: 6); or, as Agnew describes it, two features of maps: ethnocentricity, which adds geopolitical meaning
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through “a kind of subliminal geometry,” and hierarchical representation, which identifies and names sites in social terms (Agnew 2003: 19). Both of these features are present in the Google Geoweb3 and in OSM.
Regarding ethnocentricity, Agnew notes that global maps are most often “centred on Europe,” and that the Mercator projection depicts “a clear sense of Europe’s geopolitical centrality” (2003: 19). This is the case with Google and OSM maps, which are based on the EPSG:3587 Spherical Mercator projection (EPSG: 3857 OpenStreetMap wiki). Hierarchical representation is evident in more than one property of Geoweb base maps, perhaps most obviously in a proportional emphasis on spaces related to their perceived importance (Harley 1989: 7). Geoweb base maps of Western countries are developed first and, generally, more thoroughly4; though this is less evident in OSM maps, which are not developed by a single entity. Hierarchical representation of space can also manifest in how sites are named and identified, as disputed sites reveal. Two examples from the Google Geoweb are the delineation of Kosovo’s border, shown by a dashed line in Google Maps and a thin red line in Google Earth; and the labelling of the Falkland Islands, which prioritises the British name and subordinates the Argentinian name, Islas Malvinas, in parentheses. It should be noted that, in OSM, the labelling of disputed areas can be the subject of constant change5.
Dodds argues that public interest in maps is greatest during times of war and global tension (2007: 115). Yet, we contend that the Geoweb somewhat changes how maps are consumed as well as the geopolitical properties of the add-ons applied to base maps. Before the Geoweb, traditional (printed) maps were more difficult to access than new spatial media. If a consumer needed a map, they had to buy it, borrow it from a library, or receive it in some kind of public distribution (e.g., as propaganda). In other words, a special effort had to be made by either the consumer or creator, which makes it understandable that public interest in maps heightened at specific times. The convenience of the Geoweb is paradigm changing. Although consumers are still more prone to use maps when needed for a particular purpose, in the Geoweb, this
3 The term “Google Geoweb” is used here to collectively describe the Google Maps and Google Earth services.
4 This is clear in comparing the Street View option in the Google Geoweb in places in Europe and North America with places in developing countries.
5 This will be expounded upon in the next part of the paper.
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“need” may be more trivial. To use the Geoweb, a consumer requires only an Internet connection and an adequate device. Thus, for a “need” to emerge, they must only be curious; no international crisis or prospect of war must exist. Of course, the Internet and concomitant devices are not equally accessible everywhere. The paradigm shift ushered in by the Geoweb is thus constrained by the affordability of technology.
There is also the question of cartographic participation in new spatial media. It is not hard to recognise similarities between the Google Geoweb and the geopolitische karte (geopolitical maps) introduced in 1920s Italy and Germany. Boria has written an extensive paper about this controversial type of cartography, noting that “these maps represent a genuine leap forward, an added sophistication in cartographic communication techniques…. [W]hile traditional cartography presents few political elements (e. g. borders, capitals) and portrays a static political situation, a geopolitical map renders the picture dynamic, showing the historical causes of a given political situation, possible future developments thereof, or both” (2008: 280). Designed to be used by the public at large, geopolitical maps are accessible even to “many who are unfamiliar with traditional geographical maps” (Boria 2008: 280).
The main technical design innovation of geopolitical maps was the use of geometric shapes “to represent factors affecting the organization of political space” (Boria 2008: 281)6. As Gordon has pointed out, almost instantly upon Google’s release of its Geoweb, users began developing APIs (application programming interfaces) to create ‘mashups’ from existing data; and in July 2005, Google released its own API, free of charge (2007: 894). In a general sense, a mashup, or overlay, represents an API that combines geographical data from one source with a map from another (Butler 2006a; Miller 2006 and Anon 2007 by Crampton 2009a: 93). In the case of the Google Geoweb, the aim is to transform maps into programmable objects (Plantin et al. 2016: 13). This amounts to the literal replacement of existing maps (Farman 2010: 873). And put simply, this means that anyone can create a spatial narrative, tell a story, suggest an idea or a theory, promote an ideology, or conduct geopolitical activities
6 Meaning, “...arrows to indicate territorial conquest or commercial penetration, axes for alliance systems, circles or half-circles for spheres of influence, parallel lines to mark equivalent or reciprocal tendencies, broken lines for uncertainty, radial and linear structures, interrupted lines as a sign of disintegration, stars and diamonds to indicate the hubs of political forces in action, as well as borders and shadings in abundance – all are graphic solutions typical of geopolitical cartography.”
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by employing symbols on a map. The parallels to geopolitische karte are apparent, with a key difference – the geopolitical dimension in new spatial media is executed by a wide range of independent participants, instead of by an official institution or individual.
There are many types of mashups. The Google Maps Mania blog alone offers about 8,500 for download. These mashups can be browsed by date of upload and each one features a description, which makes it easy to place a mashup in context. Take, for example, a mashup named “Why NATO isn’t obsolete,” created in mid-January 2017, shortly after US President Donald Trump used this term to describe the Alliance. The mashup features a “security challenges” layer, which the creator says “shows some of the present global threats to peace and security that NATO and its partners currently faces [sic] across the globe” (Why NATO isn’t Obsolete, Google Maps Mania). This mashup also offers an interactive view, in which civil and military capabilities, missile ranges, and NATO members, allies, and friends are presented as geometric shapes. It is significant that this mashup was created after the provocative and rather geopolitical statement of a very powerful world leader, and its creation illustrates how mashups are often inspired by recent events. Indeed, the more dramatic an event, the more Google Geoweb mashups (in volume and elaboration) follow.
So, does this substantiate the claim of Dodds that popular demand for maps rises in times of turbulence? It seems the Geoweb generally follows this pattern, but in terms of participation not consumption. “Interest has shifted from the map as an object to mapping as practice…. [and] some authors suggest that cartography be understood as existence (becoming) rather than essence (fixed ontology)” (Crampton 2009b: 840; emphasis in original). Participation in the Geoweb has its own geopolitical dimensions as well. As noted, in the Google Geoweb, participation is limited to add-on creation. However, in OSM, participation lies at the core of the project.
While accepting that mapping is a geopolitical process, as far as “its implication in the practices of statecraft and of delineating sovereignty in a ‘major’ representational sense,” Gerlach discusses the notion of a “minor geopolitics” related to participatory mapping. In his use, the term minor is not conflated with size or scale but with the depiction of non-
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representational features, as a way of exposing the unspoken politics of mapping. In that regard, mapping “is also geopolitical in the way in which it cultivates affects, attitudes, bodily dispositions, collectives, sensibilities, spaces and events that are transformative of the world, but often in a register largely ignored” (2015: 274 - 275).
Geopolitical subjectivity
Clearly, the Geoweb is a geopolitical phenomenon. Ontologically, a geopolitical phenomenon holds geopolitical value that can be exploited for some geopolitical purpose. Here, we will discuss the geopolitical use of the Geoweb or, in other words, its geopolitical subjectivity.
Popular Geoweb services are (almost) always designed to be easily accessible and free of charge. This, of course, is true of the Google Geoweb and of OSM. The idea of the Geoweb is therefore in line with that of “net neutrality” – the notion that all internet content should be processed in the same manner without discrimination (Crampton 2009a: 96). The concept of net neutrality is relevant in considering the correlation between general Internet accessibility, access to and participation in the Geoweb, and the geopolitical subjectivity of the Geoweb. Since not all information is equally accessible, it is reasonable to argue that societies in which more individuals can access the Internet and have enough knowledge to use and participate in the Geoweb will see more of its geopolitical benefits. And while technology has made accessing the Geoweb quite simple (through a basic Internet-connected smartphone), such access remains uneven across the globe, as a matter of means, infrastructure, and/or knowledge.
OSM participation data offers a good illustration of this uneven distribution. Pascal Neis, a German programmer and digital geo-data enthusiast, has developed OSMstats – an independent, free-of-charge website that, as the name suggests, automatically generates OSM statistics – offering daily user participation data (number of users and changes made), presented
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by country of origin. Analysing this data, it becomes apparent that the largest share in participation comes from the same handful of countries: Germany (almost always first), the United States (almost always second), Russia, France, Italy, the United Kingdom, and Poland. There is no reason to believe participating users from these countries are anything but independent mapping enthusiasts, but their personal geopolitical culture and heritage inevitably produce a specific geopolitical subjectivity. It is thus safe to conclude that OSM has a general inclination toward the geopolitical traditions (interests, and even agendas) of those countries. This is in fact reflected in OSM’s wiki-based participatory system. Just as Wikipedia editors can change other users’ article content, participating users in OSM can change other users’ cartographic inputs. This leads to persistent online quarrels that manifest in cartographic data and political labels that are constantly changing for disputed areas7.
We were unable to find user participation statistics for the Google Geoweb, but as noted earlier, participation is not at the core of its functioning. Its cartographic political labels (borders, demarcations, names, etc.) are determined by Google’s team of experts. Because Google is shareholder-owned, it should be an independent and objective party in this process; however, it is a bit more complicated than that. Though Google operates globally and has shareholders on every continent, the company was founded in the US and is bound by American laws and regulations, which influence the geopolitical narrative of its Geoweb. What’s more, Google Earth satellite imagery is limited by US law, as image providers must follow strict distribution and publishing regulations (Kumar 2010: 170). For example, the government can “put any area off limits in the interests of national security” and very high-resolution images are subject to a 24-hour delay before publishing8 (Hafner and Rai 2005 by ibidem).
In discussing geopolitical subjectivity in the Google Geoweb, it is important to consider the notion of geopolitical scalability. Defarges highlighted
7 It should be noted that OSM has mechanisms in place to enforce objective mapping. In our opinion, there are two problems with this validation process: (i) it relies on users to find problematic inputs and fix them, and (ii) what one user sees as true may not be true to another user (truth is quite relative). More about OSM input validation can be found at the MapBox website on the page entitled “Validating OpenStreetMap.”
8 Geopolitical influence is plainly apparent in some of these laws: one of those mentioned by Kumar proscribes that “images of Israel shot by American-licensed commercial satellites [are to] be made available only at a relatively low resolution” (2010: 170).
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the difference between “micro-geopolitics” and “classical geopolitics”9, wherein micro-geopolitics involves “micro-entities” like regions, cities, and multinational companies (2006: 136 and 137). Thus, Google should operate within the realm of micro-geopolitics; and yet sometimes, this rule doesn’t hold, as Google’s utilization of satellite imagery and the political labels in its Geoweb have become points of dispute between Google and several nation-states. Kumar described some publicly known disputes in a 2010 paper, noting that they emerged as soon as Google introduced its Geoweb services. The first case came to the fore in August 2005 when the Australian Nuclear Science and Technology Organization (ANSTO) called for censorship of images of its nuclear reactors. One week later, two Dutch MPs wrote a letter to their government outlining concerns over the possible harm done to national security by these Google services. In both instances, Kumar notes, Google pointed out that the images could be obtained from other services as well and asserted that the benefits “far outweigh any negatives” (2010: 160 -161).
But not all disputes were set aside so easily, and in the context of arguments made in this paper, a particularly good case study is what Kumar describes as Google’s “showdown with India” – which lasted over a year and a half and involved threats and “publicly expressed frustration.” The dispute started in September 2005 after a report by the Times of India that images of Indian security sites were available on the web. It did not take long for the dispute to grow to encompass the depiction of India’s borders in disputed areas. Kumar notes that even Abdul Kalam, then President of India, got personally involved; and as a result, the Indian Embassy in the US received instructions to negotiate directly with Google. But Google ignored voices from India until an early 2007 visit there by Google Vice President Vinton Cerf, which finally ended the dispute after the company succumbed to India’s demands. Google released a statement disclosing that images of disputed sites would be blurred and that, in labeling parts of Indian borders, variations would be marked (2010: 162-164).
One more interesting case should also be mentioned here, at least as a side note. In January 2013, Google executive Eric Schmidt traveled to North Korea10. This was quite an accomplishment given that the country’s
9 In this particular instance, Defarges uses “classical” in opposition to “micro,” regarding only scalability.
10 Schmidt was the Executive Chairman of Google. At the time of this writing, he holds the same position at Alphabet,
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most distinguishing attribute is its inaccessibility. Interestingly, at almost the same time, Western media reported that Google Earth users could view secret camps and prisons inside North Korea. Although the imagery was of a lower quality than that received by human rights activists via Digital Globe (a commercial satellite image provider), activists nonetheless found these images very useful (Eckert 2013).
These cases and more make it clear that Google cannot be confined within Defarges’ framework of micro-geopolitical scale. Google, a non-state actor, pushes nation-states to bypass the nation-state structure and give equal accommodations to a non-state actor, thereby ceding their national sovereignty (Kumar 2010: 169). Google has thus transcended micro-geopolitics and has positioned itself within Defarges’ “classical geopolitics.” It has also developed its own geopolitical subjectivity, despite an obvious inclination toward the geopolitical culture and traditions of the US. In this way, and in great part due to its Geoweb, Google can be described not only as a geopolitical phenomenon but as geopolitical agent or subject as well.
Conclusion
As Dodds explains, maps do not represent a neutral or transparent reality (Dodds 2007: 120). Still, any number of disciplines, and contemporary geopolitical theory among them, are touched by cartography. And since space is the ontological core of geopolitics, maps – these unobjective depictions of space – can be viewed as geopolitical statements. Modern, computer-aided space representation is no exception to this.
Indeed, digital cartography, the “new spatial media,” is burdened by the same geopolitical properties as traditional maps: ethnocentricity and hierarchical space representation. And these “new” maps also reflect early 20th century geopolitische karte. Yet, digital cartography has its very own geopolitical narratives; Gerlach’s “minor geopolitics” is one
Inc., which became Google’s parent company after a 2015 reorganization.
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example, but there are many others, each distinct within the discourse of geopolitical subjectivity on the Geoweb.
The Google Geoweb specifically is confined by American laws and regulations, both because its satellite imagery providers are largely US-based and must abide by strict regulations on image publication designed to align with that country’s national interests, and because the company itself was founded in the US and is compulsory to American markets, laws, and practices. The Google Geoweb is thus unable to guarantee its objectivity in the process of Geoweb content production, especially regarding access to satellite imagery without discrimination, regardless of the place depicted, and the determination of political labels. Its geopolitical subjectivity is tinged by American influence.
Both of the Geoweb services we used as the empirical foundation for this paper are propped up by user participation. As discussed, in the Google Geoweb, this is manifested only in add-on creation; whereas, OSM is built and functions entirely on the power of crowdsourcing. The collective nature of these projects, even in varying degrees, facilitates forms of geopolitical entanglement not seen in traditional cartography, as every participating user invests in their own geopolitical culture. In the Google Geoweb, this creates a cacophony of cartographically expressed political opinions, ideas, and theories. In OSM’s base map, it results in constant changes based on various particular understandings of the features of political space, mostly in contested regions and areas.
As a company, Google should belong to the geopolitical space Defarges called micro-geopolitics, reflecting geopolitical scalability. Yet, largely due to its Geoweb, the company has engaged in disputes with several nation-states and its key personnel have had official and unofficial contact with governmental bodies. Google has thereby transcended the realm of micro-geopolitics and has obtained a geopolitical subjectivity per se.
This paper is a part of the discourse on the social and political impact of digital representations of space. The aim of this research was to explore how geopolitical narratives in cartography are reflected in the Geoweb. In other words, to examine the geopolitics-Geoweb relationship – how geopolitics influences the Geoweb and vice versa. As we have shown, all
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the geopolitical properties of traditional cartography are applicable to digital mapping, and new ones have developed. Moreover, geopolitical agents have gained a new tool and new subjects have been introduced. We believe this contribution is useful to burgeoning discourse in this field.
References
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Plantin, J.; Lagoze, C.; Edwards, P.N. and Sandvig, C., 2016. Infrastructure studies meet platform studies in the age of Google and Facebook. New Media & Society. 1-18.
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Sead Turčalo ([email protected]) is Assistant Professor at the Faculty of Political Sciences, University of Sarajevo. Sead lectures on geopolitics, international security, and international conflict management; and, along with these topics, also researches state-building, violent radicalization and other international security issues.
Ado Kulović ([email protected]; [email protected]) is a researcher from Sarajevo. His research interests are mostly geopolitics and geopolitical theory with emphasize on the spatial particularities of the World Sea. He has published several original scientific and professional papers in Bosnia and Herzegovina and Croatia. Ado was one of the founders of the Center for International Politics, which is an independent research facility from Sarajevo. He has earned his BA and MA at the Faculty of Political Science, University of Sarajevo and is currently the PhD candidate in the field of Political Science at the University of Vienna.
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Croatian International Relations Review - CIRRXXIV (81) 2018, 23-50ISSN 1848-5782 UDC 342:327.5(497.7)DOI 10.2478/cirr-2018-0002
The Effects of Post-conflict Constitutional Designs: the “Ohrid Framework Agreement” and the Macedonian Constitution
Stefan Andonovski
Abstract
In regions troubled by ethnic based conflict violence often erupts abruptly and severely. Peacemakers, then, follow unconditional paths to prevent conflict escalation. The article analyzes the ways in which post-conflict constitutional designs shape the state structure through constitutional amendments. Peace agreements as bases for constitutional reform, the article claims, have reformatory but also obstructive implications. Seeing the Ohrid Framework Agreement as a case study, the paper analyzes its implications on the development of the political system in Macedonia. On one side OFA serves as a criterion for the Macedonian Euro-Atlantic integration and a driving force for the creation of a functioning multicultural society. On the other side, the procedural and substantive flaws of the agreement undermine its absorbability in the society. In procedural sense, OFA hindered its own implementation through the used terminology and the drafting process. In substantial sense, agreement’s goals and provisions reached beyond the purpose of peace agreements and underestimated the complexity of the conflicting issues at stake.
KEY WORDS:
constitutional amendments, peace agreement, Ohrid Framework Agreement, inter-ethnic conflict, post-conflict reform
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Introduction
In regions historically troubled by civil wars and ethnic based conflict violence often erupts abruptly and severely. In such cases, peacemakers and politicians often follow unconditional paths to prevent a conflict from escalating into a full-fledged war. These various paths towards conflict resolution through constitution redesigning have provoked scholars and practitioners to devise “best practice” concepts. It has become increasingly important for practitioners to draw on synthesized conceptual approaches before designing constitutional structures that have long-term implications. Moreover, there is a need for future designs to build on previous successes and avoid missteps. In a rush for “conflict freezing”, as it will be discussed in this article, constitutional arrangements contained in peace agreements often underestimate the complexity of conflicting issues at stake, both in goal setting, procedural dynamics and substantial endurance. When setting the goals, agreements ought to realistically target the context. In order for that to be achieved, processes of agreement drafting should include a plethora of societal actors in order to set an agreed upon base for reforms. Conversely, top-down procedures in drafting tend to achieve some, but not all of the goals that have been set. In essence, the lack of actors’ participation in the procedural dynamics complicates subsequent implementation phase, which would lack local ownership.
Authors have devised the goals that are usually set in post-conflict constitution designs by analyzing large data pools of post-conflict constitutions and peace agreements. Widner (2008) discusses “three sets of ambitions”. The first set entails durability of the agreement, followed by the reduction of violence and increase in civility, which allows for institutionalization of the conflict. The third ambition underlines the importance of agreement’s self-enforcement in the future. Bearing in mind that every process varies, there is a wide-spread urge for the design drafting to entail sense of inclusion and trust. “Constitution makers must find a way to reconcile the need to tie in powerful elites with the demand for a consultative process that fosters political dialogue and empowers the people” (Samuels and Hawkins Wyeth 2006).
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In unfolding the argument, the article presents the dilemmas of the the Ohrid Framework Agreement1, regarding the limits of the constitutional-institutional engineering. In that sense, we analyze the most prominent spheres of influence of the Ohrid Framework Agreement in the Macedonian post-conflict constitutional state structure. The Agreement’s widely appreciated as a basis for the creation of a functioning multiethnic society, and a criterion for the Macedonian integration in the Euro-Atlantic institutions. However, while the Agreement should be praised for these aspects, its problematic implications should not be underestimated. In procedural sense, the Agreement, through its imprecise terminology hindered its own implementation. Being a peace agreement, OFA determined in detail the processes and provisions of the constitutional remaking, not allowing for an inclusive drafting process. In that way, a political agreement dominated over the only constitutional body that directly represents the citizens in the country. As discussed later, the agreement transcended general goals of peace agreements – to bring about end to violence and allow for institutionalization of conflict – and set forth all-encompassing goals. In substantial sense, the Agreement overestimated the ability of the Macedonian society to absorb its goals and provisions by introducing the paradigm of the “spirit” of the agreement. This has made OFA’s implementation prone to political infringements and biased evaluation.
In unfolding the argument, the article describes the socio-political context prior to the conflict of 2001. Then, it analyzes the structural remaking envisioned in the Ohrid Framework Agreement with the constitutional amendments adopted in November, 2001. Subsequently, the article describes the implications of the implemented provisions, both in terms of process and substance. Finally, the argumentation offers a perspective on the possible lessons that can be learned for future post-conflict constitutional designs, as well as some thoughts on the development of the Macedonian political system.
1 In the text the terms “the Ohrid Framework Agreement”, “the OFA”, “the Ohrid Agreement” or “the Agreement” are used interchangeably.
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Macedonia Leading up to the 2001 Conflict
On 8 September 1991, amidst the socio-political disintegration of Socialist Yugoslavia, Macedonian citizens laid the grounds for an independent Republic of Macedonia through a popular referendum. On 17 November 1991, the Assembly adopted a new constitution, which promoted Macedonia’s independence, sovereignty and democratic character. On the international scene, however, the path towards recognition was obstructed, largely because of the problem with neighbors’ unwillingness to accept the name of the country2.
For ten years, the international community perceived Macedonia as a successful multiethnic model of coexistence. Macedonia was trumpeted a conflict prevention example, when compared to the ethnic cleansing, war crimes, genocides and social destruction in the broader region. Its first president, Kiro Gligorov, labelled Macedonia an “oasis of peace”. Being that the demographic structure was complex, Macedonia represented a multiethnic society at its finest. Ethnic Macedonians comprised 65.3% of the population, ethnic Albanians were 21.7%, 3.8% were ethnic Turks, 2.5% Romany, ethnic Serbs were 2.1%, and 6% were in other ethnic groups. (ICG Balkans Report 2001: 109). However, the claims that the conflict in 2001 was unexpected, and that the conflicting issues are to be found exclusively in that year, are misleading. The complexity of the context, which intertwined nations, language, human rights, separatism, historic momentum, spillover and Balkan heritage, sadly was to be understood only after the conflict.
There are numerous underlying and mobilizing factors that lead to the conflict in 2001, but the domestic and foreign actors were not eager to act preventively3. Without comprehensively analyzing all the issues that drove the conflict, it is important to note the ones that were targeted with the Agreement. First, the 1991 Constitution and the political discourse were predominantly ethnocentric, which set the terrain for institutional
2 More on the name issue see Shea ,J,. 1997. Macedonia and Greece: The Struggle to Define a New Balkan Nation. Jefferson, North Carolina: McFarland & Company, Inc.
3 On the underlying factors of the conflict and the conflict itself, a comprehensive view can be seen in Phillips, J., 2002. Macedonia: Warlords and Rebels in the Balkans. London: I.B. Tauris.
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and structural injustices. The Constitution, while establishing a liberal democracy and proclaiming fundamental human rights and freedoms, was insufficiently inclusive for the ethnic minorities. That lack of inclusion was especially felt in the realm of the use of another language in official communication, which was allowed only where other nationalities were a large majority strictly on local level. Also, the central position of the Macedonians as a constituent people of the country was seen as ethnocentric, a notion that was invigorated by the promotion of the Macedonian Orthodox Church as a confessional leader of the country. As a result, Albanian political parties boycotted the Referendum and the constitution adoption. They organized a parallel referendum asking for autonomy of Western Macedonia. The ethnic majority, overwhelmed by the historic moment of the Macedonian independence, was not alarmed by the isolation of the Albanian population. Only in the aftermath of the conflict it was understood that the Constitution was embedded with these structural injustices, making it a casus belli.
Second, there was a systemic fault in the structure of state institutions, which accentuated the social injustices. The public administration was not designed to represent the societal multiethnic conglomerate, especially in the use of language, education, and structure. There were issues with the participation of Albanians in the school system and their right to mother-tongue education, with an accent to the universities. The institutional representation of Albanians was also problematic when combined with the inability to use the Albanian in official institutional communication, and the claims for discrimination on ethnic lines. This led to serious country-wide protests when the government proclaimed the Tetovo Faculty of Pedagogy illegal, and violently stopped the peaceful protests in the towns of Tetovo and Gostivar. The clashes with the security forces led to imprisonment of mayors and other prominent Albanian leaders4. These outbursts of violence and the lack of institutional response, further eroded the political legitimacy of the state institutions, creating mistrust among large portion of the population.
Third, the spillover effect from the 1999 Kosovo war and the refugee crisis emerged as extra-constitutional drivers. Former fighters from the Kosovo Liberation Army (UCK), unsatisfied with the conclusion of the war
4 More on the problematic issues during the transition period in the 1990s can be seen at http://republika.mk/348197
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on Kosovo, expressed their irredentist and overtly nationalistic territorial claims. Their proclaimed goal was the “re-creation of Great Albania” (“Ilirida”), which would include the western part of Macedonia, Albania, Kosovo and parts of Montenegro5.
The conflict started in the spring of 2001, when the so called National Liberation Army (NLA) occupied small villages in western Macedonia. The Albanian rebels at first demanded territorially cleansed Albanian towns and villages, and subsequently pivoted towards pledges for human rights and freedoms. When in April the NLA killed a number of Macedonian soldiers, a severe crisis started unfolding. Macedonian security forces, in order to disperse the terrorist groups, countered with heavy artillery in the conflicting pockets. Ethnic Macedonians, outraged by NLA’s claims for “liberated territories” and the killings, took on innocent ethnic Albanians and religious buildings in cities where Macedonians were the dominant population6. As the crisis escalated, it was clear that the Macedonian authorities are unable to swiftly outgun the NLA. The international community unanimously supported the elected government, identifying the rebels as “bunch of murderous thugs whose objective is to destroy a democratic Macedonia”7. The peak of the escalation happened in June, when the NLA captured the village of Arachinovo, only few kilometers away from the capital Skopje, the international airport and the NATO (KFOR) bases. After a combined actions by the Macedonian police and the army, the NLA remained in the village, while their cells throughout the country counter-attacked the security forces. This prompted the international community to intervene in order to prevent further escalation. Javier Solana, then EU High Representative for Common Foreign and Security Policy, arrived in Skopje in order to expedite a negotiation process before the conflict turned into a full-fledged civil war.
5 In a televised interview, one of the activists in KLA and NLA claimed that The Kosovo KLA had other goals, i.e. unification of all the territories where the Albanians live. But international officials, according to them, especially the Americans, cut it off and prevented them from flying outside the borders of a single state. The analysis can be seen at http://bit.ly/2HtkUpS
6 More on the issue can be seen at http://www.nytimes.com/2001/06/07/world/macedonia-threatens-to-declare-state-of-war-against-rebels.html
7 Most prominent in his discourse was the NATO Secretary General, Lord George Robertson. More on the issue can be seen at http://news.bbc.co.uk/2/hi/europe/1317049.stm
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The Ohrid Framework Agreement (OFA)
The negotiations included a plethora of international actors, who created the necessary procedural dynamics needed for the conflict resolution. The mediators ,formally facilitators, in the political negotiations included James Pardew, a US diplomat, and a representative from the EU – Francois Leotard. The facilitation process was assisted by Solana, the OSCE representative Robert Frowick, and the Dutch diplomat Pieter Feith. While Pardew and Leotard negotiated the issues with the Macedonian political actors, Feith and Frowick acted as intermediaries between the NLA rebels and the officials. The international community put a strong pressure on all parties to find an alternative to the escalating violence. NATO, OSCE and EU representatives combined strategies of support and shaming and blaming in order to induce the actors to accept the non-violent alternative of dealing with conflicting issues.
On 13 August 2001, in Skopje, the Macedonian political representatives signed the Agreement, after prolonged and intense negotiations in Ohrid. Although a compromise between the two parties of the conflict – Macedonian security forces and the National Liberation Army (NLA) - OFA’s signatories were the President of the Republic of Macedonia, and the leaders of the two predominant parties from the Macedonian and the Albanian block. The international community representatives, who drafted OFA, acted as witnesses of the signing ceremony.
“The Ohrid Framework Agreement is structured around four areas: Securing peace (Articles 1 and 2); Decentralization and use of emblems (Articles 3 and 7); Regulations relating to minorities (Articles 4 and 5); and Education and use of languages (Article 6)” (Czymmeck and Viciska 2011: 75). Moreover, it contains three annexes that regulate in detail the amendments of the constitution, the needed changes in laws and the implementation of the Agreement.
The objectives and the principles of the Agreement were set highly. OFA aimed not only to stop the erupting violence, but to secure respect for minorities, integration of the country in the European Union and NATO,
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and democratic development of the country in different spheres. The preamble of the Agreement, containing those goals, stated:
“The following points comprise an agreed framework for securing the future of Macedonia’s democracy and permitting the development of closer and more integrated relations between the Republic of Macedonia and the Euro-Atlantic community. This Framework will promote the peaceful and harmonious development of civil society while respecting the ethnic identity and the interests of all Macedonian citizens.” (Ohrid Framework Agreement 2001: Preamble)
From the Preamble it was clear that OFA’s first aim was to secure Macedonia’s existence. Then, the goal was to guarantee and develop its democratic future by assisting its integration to the Euro-Atlantic institutions and promoting ethnic diversity. Evidently, the goals of the peace framework strived for more than peace and prosperity. They envisioned to add value to the democratic ambient in the country, protect human rights, promote civil society, and drive the international integration of the country. Additionally, using a quid pro quo model, the Agreement draw on the demands of the two conflicting parties. Authors suggest that “the Ohrid Peace Agreement is a compromise: Macedonia is unitary state … but ethnic Albanians are increasing their influence, especially on the local level, and have obtained a large right of veto in the Parliament” (Maleska 2005). On one side, the Agreement established that democratic reforms in the country can only be made by political means On the other one, it stressed the importance of the mechanisms for power-sharing and inclusion of minorities as the only path towards a functioning democracy – “There are no territorial solutions to ethnic issues.” (Ohrid Framework Agreement 2001: Article 1.2). Based on Macedonian demands, the Agreement recognized the territorial unity of the country within its borders and its sovereignty. As a counter step, the Albanian side gained high degree of autonomy by broadening the rights for local self-governance and decentralizing state powers. Finally, the Agreement stressed the conceptual significance of non-discrimination and equal treatment of all, established a principle of bi-ethnic consensus on sensitive questions, and pledged for substantial foreign aid for full implementation of its complex provisions. Essentially, the Agreement generally followed Lijphard’s consociational model of democracy, without engaging in
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federalization and bicameralism – “1. Executive power sharing in broad coalition cabinets; 2. Executive-legislative balance of power without resignation of the government; 3. Multiparty system (not two-party); 4. Proportional representation; 5. Interest-group corporatism; 6. Federal and decentralized government. The power is shared between the central (federal) government and the federal units in the composition thereof; 7. Strong bicameralism; 8. Constitutional rigidity; 9. Judicial control (revision); 10. Independence of central bank”. (Lijphart 2003: 97-105)
The goals set forth in the preamble of the agreement transcend the pure power-sharing model and pledge for cooperation among actors for reaching common goals, especially underlining the goals of Euro-Atlantic integration and promotion of civil society. That meant that the Ohrid Framework Agreement offered a blend between a purely consociational and an integrative model. It set consociational features as a basis for the new constitutional structures, but also promoted integrative aspects of common trans-ethnical goals. However, the goals that were envisioned went beyond the aspirations which drafters of peace agreements usually set in post-conflict constitutional designs, which focus on the secession of violence, transformation of conflict and implementability of a durable agreement (Widner 2008). By adding the aspiration for Euro-Atlantic integration and the development of civil society as a common goal for all the signatories, the Agreement paved the way for a broader reading of its purpose in the political system and introduced its intangible “spirit”.
Constitutional amendments
The Macedonian Assembly, by November 2001, passed the demanded amendments to the Constitution, drawing on the provisions stated in the Annex A of the OFA. The most contested issue was the amendment to the Preamble of the constitution, as well as the amendments on the voting procedures, the institutional representation of minorities, official use of languages, religious organizations, the national heritage, the functioning of fundamental institutions, and the provisions that regulate the local self-government.
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Amendment 4 of the constitution modified a crucial component of the preamble – the concept of national state. The 1991 Constitution preamble stated that “…[M]acedonia is established as a national state of the Macedonian people, in which full equality as citizens and permanent co-existence with the Macedonian people is provided for Albanians, Turks, Vlachs, Romanies and other nationalities living in the Republic of Macedonia”. This mono-national formula did not consider more than 30% of the population in the country as constituent people. Therefore, based on demands from the Albanian signatories, the Agreement entailed the civic concept, not specifying an ethnicity. Therefore, Annex A of the Agreement begins with: “The citizens of the Republic of Macedonia, taking over responsibility for the present and future of their fatherland,…” This version of the preamble embraced the concept of individual rights. However, this approach was in contrast with collective and communities’ rights conceptualized as a general rule in the agreement. According to some scholars, the Macedonian people and nation disappeared as an ethnic category, as well as a sociological one. (Skaric 2004) This “citizen approach” was severely criticized by politicians, experts and the general public8. After a prolonged debate, an intermediate solution was achieved. As such, Amendment 4 contains nation, civic and binational state elements, stating:
“The citizens of the Republic of Macedonia, the Macedonian people, as well as citizens living within its borders who are part of the Albanian people, the Turkish people, the Vlach people, the Serbian people, the Romany people, the Bosniak people and others…”
The promotion of several constituent peoples of the country and the primary position for the Macedonian citizens as a majority is a democratic achievement worth noting. It stresses the rights of the citizens accompanied with the rights of the communities, making the ethnicities equally important pillars of the country. However, the list of communities is incomplete. The term “others” excludes more than 20 registered minorities, which in the subsequent years expressed their grievances of not being part of the constituent conglomerate.
8 More on the discussion for the amendments to the Preamble see at http://bit.ly/2I1cxyW
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The second structural transformation is the voting procedure, which established a new form of minority veto. Amendment 18, together with amendments that regulate the spheres of interest to the communities, added an additional obstacle to the absolute majority vote (50% of the representatives plus one), and the qualified majority vote (two-thirds of the representatives). According to these amendments, “a law that affects the communities of the country shall require a two-thirds majority vote [or an absolute vote] of the total number of representatives, within which there must be a majority of the votes of the total number of representatives who belong to the communities not in the majority of the population of Macedonia9.” The procedure would affect future amendments to the constitution and laws that regulate: local self-government organization; the use of language, education, personal documentation, culture and use of symbols; the fundamental values of the country; the equality of citizens under the law; the freedom of religious confession; the protection of identity; the protection of the national heritage; election of Public Attorney (Ombudsman), the Council for Inter-Ethnic Relations, the Security Council of the Republic of Macedonia, the Judicial Council and the Constitutional Court judges. The voting procedures amendments were to ensure that there could be no “tyranny of the majority” when the Assembly decides on questions that are sensitive to the ethnic minorities. Some scholars feared that this amendment could turn into a “tyranny of the minorities” (Skaric, Siljanovska-Davkova 2009). However, this fear was proved unfounded, because the new voting procedure has enabled an inclusive debate among representatives on sensitive issues, but has not caused major blockades on crucial issues.
The third substantial sphere where the Ohrid Framework Agreement brought a change was the use of languages on central and local level. According Amendment 5 of the Constitution, the official language of the country is Macedonian, which shall be used within the whole territory of the country and international correspondence. In addition, any language spoken by 20 percent of the population is also an official language according to that article of the constitution. The 20 percent threshold, a function of demographics and not of symbolic recognition of status, meant that Albanian was the only other language which was granted a tacit officialization. The use of the second official language was to be in
9 Constitution of the Republic of Macedonia: Amendments 10, 11, 12, 13, 14, 15, 16, 18.
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spheres of concern for the minorities, such as: issuing personal documents, using the language in communication with the public administration, and education. The change in this sphere is with regards to the percentage and the scope of the usage, decreasing the threshold to 20 percent from the former 50 percent. However, the scope of the usage was left for interpretation, which nowadays causes disturbances to the Macedonian political system. The imprecision in the article allowed the parliamentary majority to propose law extending the use of the Albanian language in all spheres, making it a second official language in all institutional correspondence. This law calls upon the right for a second official language given by the Ohrid Framework Agreement and Agreement’s importance for the integration to the European Union. As a result, the Law is proposed as a law that integrates the Macedonian legal system with the one of the European Union10. The opposition coalition and the President, in an attempt to block the adoption of the law, put a suspensive veto and filed more than 30,000 amendments, stating Law’s unconstitutionality and the violation of OFA’s provisions11. This lack of understanding between the societal actors demonstrates that the Agreement is prone to various political interpretation and shows the conflicting directions in which the Agreement can be implemented.
The fourth sphere lies in the concept of equitable representation in all public administration agencies, which became part of the fundamental Constitutional values. “The purpose the Amendment 6 was to reflect the ethnic structure of the population in the central government and the public life in general” (Skaric, Siljanovska-Davkova 2009: 176). In paragraph 4.2. of the OFA it is stipulated that “Laws regulating employment in public administration will include measures to assure equitable representation of communities in all central and local public bodies and at all levels of employment within such bodies, while respecting the rules concerning competence and integrity that govern public administration.” The reform allowed for an increased access of disadvantaged communities to public administration jobs. However, the implementation of this provision, as discussed later in the article, negatively affected the professionalization and modernization of the public administration.
10 The full proposal can be found on http://bit.ly/2r1WEki
11 The President put a veto on the adopted law claiming that it infringed articles of the constitution and had other procedural and substantial anomalies. For full review of the veto see http://pretsedatel.mk/mk/2011-06-17-09-55-07/2011-07-19-10-40-39/4754.html
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The fifth transformation, which includes Amendments 7 and 9 of the Constitution, protects the freedom of religious thought and expression of religious beliefs. Amendment 7 begins by setting an equal footing for the religious organizations: “The Macedonian Orthodox Church, as well as the Islamic Religious Community in Macedonia, the Catholic Church, Evangelical Methodist Church, the Jewish Community and other Religious communities and groups are separate from the state and equal before the law”. Furthermore, Amendment 9 obliges the state to “guarantee[s] the protection, promotion, and enhancement of the historical and artistic heritage of Macedonia and all communities in Macedonia and the treasures of which it is composed, regardless of their legal status”. These two amendments promote the social inclusion of the different communities and religious groups in the country, respecting their diversity and historical and cultural heritage. By creating a Committee for Inter-Community Relations, the Assembly strengthens the focus on intercultural dialogue. Committee’s obligation is to recommend solutions to the Assembly for inter-ethnic questions.
Finally, Amendments 16 and 17 regulate the voting procedure and the scope of functions of the local self-government. These provisions represent a basis for the development of a decentralized governing system on a local level. The amendments ensured the direct participation of the citizens in the functioning of their municipalities, and created an opportunity for making relevant decisions by the people concerned.
The complexity of the constitutional amendments and their effects are a widely debated topic.12 Scholars have predominantly followed a path of unconditional appraisal for the constitutional reform derived from the Ohrid Agreement. It is clear that the agreement, which has brought a stable peace to Macedonia in the last seventeen years, remains to be the base for amicable inter-ethnic communication and social inclusion. However, some of the procedural and substantial flaws have not been analyzed so far. With a goal to add value to the discussion, the article critically observes some of the crucial implications of the agreement for the Macedonian political system. The idea is to underline the prospects
12 See Beiber F. Power Sharing and the Implementation of the Ohrid Framework Agreement. (2008) Skopje: Friedrich Ebert Stiftung, Risteska M, Daskaloski Z (eds) One Decade after the Ohrid Framework Agreement: Lessons (to be) Learned from the Macedonian Experience (2011), Skopje: Friedrich Ebert Stiftung and Center for Research and Policy Making.
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for the implementation of the Agreement in subsequent years, and to derive some lessons for similar endeavors.
Implications of the constitutional amendments
The implications of the constitutional amendments are a deeply contested issue among the Macedonian and Albanian population and political elites. In political discussions, the agreement is seen as a driver for beneficial reforms by some of the Albanian political entities, while others stress its inability enforce the demanded set of transformations. In the Macedonian political sphere the Agreement is seen rather deterministically, from two extreme viewpoints. One percentage of the population view it as an act of treason, and others have considered OFA a frame for building a sustainable multiethnic society with equal treatment for every citizen. However, the complexity of the Ohrid Framework Agreement demands a detailed and multi-pronged analytical perspective. Therefore, in order to draw practical solutions it is essential to understand the formal and substantial implications of OFA.
In perspective, the implementation of both Agreement’s articles and principles is a crucial criterion for the Macedonian integration in the European Union and NATO. According to the European Commission, “[t]he Ohrid Framework Agreement remains an essential element for democracy and rule of law in the country” (EC Progress Report 2012). Therefore, the implementation of the Agreement is the mechanism through which Macedonia can adhere to the EU Copenhagen political criteria, which require “stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities“13. By strengthening the minority rights, the society has embraced a dynamic approach of building modern multicultural democratic structure. The Assembly has undertaken a plethora of measures to protect minorities with a positive long-term effect on their integration. Today, it is clear that the agreement has fulfilled the primary purpose – to establish peace and
13 Accession criteria (Copenhagen criteria) - http://eur-lex.europa.eu/summary/glossary/accession_criteria_copenhague.html
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to end the violent conflict. By providing inclusive institutional procedures, it has offered basis for development of human rights and transformation of conflict.
However, there are three debatable aspects in terms of the procedural complexities in the Agreement and its formal endurance. Firstly, a political agreement written in English was used to amend a constitution adopted in Macedonian, creating serious implementation deficiencies. Secondly, the Agreement forced popularly elected representatives in the Assembly to vote according to the decisions of the signatories. Thirdly, OFA implicitly established a leeway for armed groups in the future to pressure for constitutional rearrangement.
Ohrid Agreement’s only authentic version is the one written in American English14. In that sense, when drafting the provisions, peace negotiators did not fully take into account the differences between legal terms in the continental and common law systems. In accordance with the 1991 Constitution, the Ohrid Agreement had to be drafted and adopted in Macedonian, as the only official language in the country. Additionally, the implementation reforms were complicated because the English version was the only agreed basis for interpretation of the provisions and the “spirit” of the agreement. As a result, there have been dilemmas emerging from the differentiation in the meaning of legal terms used in the Agreement. For instance, there was a dispute on the term ‘community’ because in Macedonian, its meaning is imprecise both conceptually and contextually. The dilemmas were if the term was to represent a local community or an ethnic one. “If it refers to an ethnic community, it is not clear whether it includes the Macedonian ethnic community or only national minorities”. (Skaric 2004: 96) Moreover, phrases such as ‘public body’ or ‘public institution’ have an unspecified meaning. In Macedonia, there are numerous institutions that have public character, including: public enterprises, government agencies, agencies of the local self-government, partnerships etc. However, none of them are differentiated into categories used in the agreement. As it will be discussed later, the Agreement was insistent on the principle of equal representation of communities on all levels in the public life. Yet, with the impreciseness in the wording, it became unclear what are the areas that the term ‘public
14 Paragraph 10.2., Ohrid Framework Agreement.
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life’ encompasses. In practice, these formal anomalies were a burden to a substantial implementation. Specifically, the anomalies came into practice with the aforementioned Law on the use of language spoken by 20% of the population, where the use of the Albanian language is extended to all public areas. Those public areas are numbered in the law, but the scope of the usage remained unclear. There is a continued debate if the areas would include private companies which affect public sectors, private cultural and health facilities, private universities, etc. Such ambiguity demonstrates that the legal terminology used in the Agreement poses an obstacle to the meaningful implementation.
Another procedural implication is that the provisions of the Agreement forced popularly elected representatives in the Assembly to vote according to the decisions of its signatories, thereby creating an unconstitutional process of constitution amending. The Constitution in Article 61 stipulates that “The Assembly of the Republic of Macedonia is a representative body of the citizens and the legislative power of the Republic is vested in it.” More importantly, Article 62 states that “the Representative [in the Assembly] represents the citizens and makes decisions in the Assembly in accordance with his/her personal convictions.” Finally, according to Article 68, line 1 and 2, the Assembly is the only constitutional body that is responsible for adopting and changing the constitution, as well as adopting laws and giving an authentic interpretation of laws. OFA disrupted this concept because it proposed changes of the constitution circumventing the Assembly. The signatories agreed on the exact provisions that would be incorporated in the Constitution, stipulated in Annex A and B of OFA. This meant that the representatives had to discuss and amend the constitution, as stated in the Agreement. According to Paragraph 8.1:
“The constitutional amendments attached at Annex A will be presented to the Assembly immediately. The parties will take all measures to assure adoption of these amendments within 45 days of signature of this Framework Agreement.”
These provisions represented an obligation for the signatories to pressure their peers in the Assembly in order to assure an adoption of the amendments, flagrantly violating Article 62 of the constitution. This meant
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that a political agreement dominated over the only constitutional body that directly represents the citizens of the country. Without questioning the attitude of the representatives towards the constitutional amendments, the fact that a political decision was made on a “higher” level, constrained the free decision of the popularly elected representatives. This top-down approach did not allow for an inclusive and legal process of constitution amending. In the rush to appease the conflicting sides, the drafters did not allow the elected parliamentary representatives to have a say in the process. The approach also excluded civil society activists, university professors, practitioners and experts. The lack of public debate led to uninformed choices on the new constitutional design, affecting both the quality of the text and the legality of the procedure. Authors argue that “Informed choices are particularly vital in these contexts where peace is fragile, populations are sharply divided, leaders tend to be inexperienced in governance, and traditional checks and balances are likely to be very weak” (Samuels and Hawkins Wyeth 2006). Essentially, exclusion from the drafting process later led to lack of ownership in the implementation phase. Conversely, if there was a phased process envisioned, in which the prime goal would be the secession of violence followed by a prolonged and inclusive debate on the constitutional arrangement, it would have allowed for an all-encompassing constitutional amending procedure. Such process would have guaranteed peace and would have increased the quality of the amendments. Moreover, the inclusion of an aggregate of actors in a fruitful public debate would have led to meaningful participation of all in the implementation phase.As a third procedural implication, OFA implicitly established leeway for armed groups in the future to pressure for constitutional rearrangements. While the Constitution provided a transparent and inclusive amending procedure, OFA tacitly legitimized the use of violence as a way of pressuring the parliament to engage in constitution remaking. Instead of pursuing constitutional transformation through institutionalization of the conflict, the agreement, by honoring rebels’ demands, allowed proposals reached with violence to be put into constitutional amendments. This set forth a negative example, using which future rebels and/or terrorists could demand systemic political changes. “The problem appears when it is assessed that the conflict is cost-effective so the nationalist requests are enhanced”. (Vasović 2003: 43) In that sense, this critical implication poses a dilemma: Can amendments achieved through violence legitimize the use of force by radical groups for fulfillment of their political agendas? The dilemma was soon put into practice with
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the platforms used by outlaws from the former KLA and NLA during the outbursts of violence in the following years. For example, in the clash with the security forces in Kumanovo in 2015 the terrorists pledged fighting “for the issue of the disintegration of the Ohrid Framework Agreement and the alleged discrimination against Albanians in Macedonia15.” The fact that violence should never be accepted as an instrument for democratization is undermined by the Agreement’s unconditional admirers. The political support for groups who use violence to change the political system has shown to be costly, both politically and with regards to human lives and infrastructural destruction. The alternative to the swift top-down approach which includes armed groups’ demands, would entail preemptive power-sharing solutions and secession of violence. Such agreements would be followed by phased democratic changes, strengthened by revoking of the political support to armed radicals by all societal actors.
In substantial sense, the agreement, in its goals and provisions, overestimated the ability of the Macedonian society to absorb the all-encompassing solutions. The set goals went beyond stopping and de-escalation of the violence. They also entailed securing the democratic future, development of closer and integrated relations with Euro-Atlantic institutions, peaceful and harmonious development of the civil society and respect for ethnic identity and the interests of all. Apart from the goals which were discussed in the previous section, some of OFA’s provisions also caused practical problems in their implementation. Here, we analyze the implication of the aspects such as the selection of public administration and the paradigm of the “spirit” of the Agreement.
Domestic and international actors pushed for expedited implementation of the principle for equitable representation of minorities on all levels of the public administration. Such implementation has demonstrated the unpreparedness of the Macedonian society to “absorb” the Agreement. Orlovic asserts that “Proportional representation, although essentially good, through allocation of quotas doubles the administrative posts and public expenditures”. (Orlovic 2015) The Agreement itself, in Annex C, regulated the process of employment of the minority communities, stating that “[a]s initial steps […] the parties [are] committed to ensuring that 500
15 One of the leaders of the group – Commander Malisheva – wrote a letter from the prison in Stip explaining the purpose of their entrance to Kumanovo and the organized clash against the Macedonian security forces. More on the issue in Macedonian see at http://bit.ly/2qX4LPn
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new police officers from communities not in the majority in the population of Macedonia would be hired and trained by July 2002, and 500 additional such officers will be hired and trained by July 2003”. Since the Agreement, minority communities’ representation has been increased on all levels of the public administration, but the full demands have not been met. Authors argue that the trend of “inclusion of Albanians in the public institutions will have to be continued, because of the imbalance between the number of the employed and the number of persons belonging to the Albanian community in Macedonia”. (Skaric 2004: 104) However, the employment on ethnic basis contradicts the criterion for professionalization of the public administration, set in the platform for EU integration. Authors comment that jobs in public institutions have been awarded to party loyalists on both sides, replacing more qualified professionals. “Hiring Albanians also risks becoming a “box ticking exercise” in which many new employees have no clearly defined job description, office or equipment” (CGE Report 2011: N°212).
According to the Ministry of Administration, on 31 December 2016, 129,653 people were working in one of the 1,291 public institutions in Macedonia (Yearly Report on the employed in the public sector 2017: 28). With more than 6% of the population employed in the public administration, there is a clear lack of capacity of the administration to perform its primary function – to serve the citizens. This implication demonstrates that the Agreement can only be absorbed if the society enters an effective process of modernization. The circulus vitiosus can be broken only by solid economic progress, driven by professionalization of the workforce. Such progress would be driven by the innovative measures in the private sector, which should remain the primary employer. Therefore, it is essential for OFA to inspire this trend, not to be its counterpart.
Regarding the “spirit” of the Agreement, there have been two contesting approaches. On one side, a more legalistic approach interprets agreement’s provisions as they are written in the text, without deriving mantras and guiding motives. On the other side, there is a broader approach, which reads the agreement through the lenses of a socio-political context. This politicization of the provisions and their broad interpretation as a source of constitutional law, further drives the ethnic polarization in the society. There are two most evident examples. First, in
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the last presidential elections, the ruling political party from the Albanian block asked for a concept of consensual election of the president of the country, in line with, according to them, the spirit of consensual democracy envisioned in OFA. Until now, the president is elected on direct popular elections with the majority of votes of all citizens, as regulated by the constitution. The party ,DUI, stated that it would not legitimize the elected president because of the lack of votes from the Albanian community. Meeting their demands for consensual election would require new amendments to the constitution, something that was not agreed in OFA. Second example of such extension of OFA’s spirit was evident early in 2017, when Albanian leaders from Macedonia signed the so called “Tirana Platform”, based on the spirit of the Ohrid Framework Agreement16. Under the auspices of the Albanian prime minister, the signatories pledged for a bi-national reengineering of the constitution. The redesigning would be accompanied with the use of the Albanian language as an official constitutional language, including its use in the army, on state emblems, its international use Finally, changes were demanded in the public finances regarding municipalities, affirmative measures for financing Albanians in the cultural institutions, creation of central institutions for the promotion of the Albanian language etc. This type of extending the “spirit” of the agreement to all forms of elections and decision-making complicates the Macedonian political future. In essence, insisting on the autonomous power of the Agreement and its superordinate position over the constitution, undermines the principle of rule of law. On the other hand, the rule of law represents a principle without which there can be no meaningful democratization of the political system and the society in general.
Rights based solely on ethnic belonging further drive the polarization of the people on ethnic lines. This threatens severe division within the society. Some state that the concept “[is] rather divergence and separation than integration” (Orlovic 2015). This divergence starts from elementary schools, affects the secondary education, and peaks on universities. The strict implementation of mother-tongue education principle in separate schools, divides cities and communities. Albanians study in their own elementary schools, graduate from universities where teaching is exclusively in Albanian, which significantly decreases the
16 The full text of the “Tirana Platform” can be found at http://netpress.com.mk/wp-content/uploads/2017/03/1AB.jpg
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communication with Macedonian peers, friends and neighbors. This mono-ethnic educational approach hinders social cohesion from early age, and decreases the personal contact. Some argue that “in many cases, the formal organization of power along identity or ethnic lines seems to entrench the divisions that fueled the conflict, rather than ameliorate them, and divisions appear to become radicalized during the power-sharing phase” (Samuels and Hawkins Wyeth, 2006). Essentially, what Macedonia needs is an inclusive concept for all the citizens, which accepts and promotes different nationalities. The resolution of the conflict would go beyond the creation of a nation-free or bi-national state, and demand for multiethnicization of politics and policy making on all levels.
The simplest solution to separate the “hostile” ethnic groups that guarantees a “negative” peace (based on “ethnicization” of politics and ghettoization of citizens from different ethnic backgrounds), according to some scholars, is a quick, but not a qualitatively satisfying solution (Vankovska 2014). Therefore, the Agreement aimed but failed to target all the roots causes of the conflict, such as the structural injustice and violence which were present in the societal context in the 1990s. Instead, it promoted the belief that a constitutional re-arrangement by itself would automatically eliminate the conflict in Macedonia. On the contrary, the expansion of its spirit way beyond the aspirations of peace agreements coupled with all-encompassing goals of development and international integration, protracted as well as hindered its implementation.
Going forward – 17 years after Ohrid
This year marks the 17th anniversary of the Ohrid Framework Agreement. That allows for scholars and practitioners to evaluate Agreement’s medium-term outcomes. As it has been analyzed in the article, the implications of the Ohrid Framework Agreement transplanted into Constitutional amendments are complex and multi-pronged. These amendments initiated multivalent and diverse processes, which were contextualized by the particularities of the Macedonian society and political considerations. Even though those processes make devising a generalized conclusion
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difficult, the ex post facto analysis allows for some lessons to be drawn for future post-conflict constitutional redesigning.
Today, the Ohrid Agreement is one of the pillars of the Macedonian multiethnic social reality. All major political parties’ platforms entail the goal for Macedonia to become an integral part of the European Union and NATO. In this sense, the Agreement represents a criterion for success of the reforms and a protector of minorities’ rights. However, the Agreement has intrinsic flaws which hinder the process of its own implementation. As has been analyzed, the Agreement cannot be fully absorbed in the political system, neither by the criterion of its goals, nor by its over-reaching spirit which allows for free interpretation by political actors.
Several implications should be taken into consideration. First, in procedural sense, foreign terminology of agreements creates difficulties in the implementation of the provisions into the domestic legal system. Therefore, the language in peace agreements that entail constitutional redesigning should reflect the legalistic practice from the original constitutional framework. This can be done swiftly if the process includes local experts who would consult the process, adding value to the final draft. Even more, a direct transplantation of agreement’s provisions into constitutional amendments undermines some procedural principles, such as, the independence of elected representatives, their right to vote and the process of law adoption. As was discussed in the article, agreements could, implicitly, institute a new harmful constitution amending procedure, through force and external pressure, contrary to the accepted principles of modern democracies. In that sense, agreements which purpose is to bring about developmental change, should not infringe established liberal principles. Peace agreements should set the stage for a process of institutionalized constitution redesigning, and serve as a driver for development of reforms and progressive democratic principles. Therefore, peace agreements should follow a phased approach, in which there will be steps for averting violence, institutionalizing conflict resolution, and forging a forum for constitutional redesigning.
Second, constitutional-institutional engineers should set the goals of the peace agreement realistically. If the approach of the peace process is mono-dimensional – stopping escalation and freezing violence – then
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internationally drafted agreements would suffice. However, if the goals include democratic development, internal and international integration, promotion of civil society and protection of minorities, peace agreements should take into consideration the intangible issues of political folklore, emotional tensions and historical imprints. Thus, if the social context is misunderstood or neglected in the post-conflict design, it can put ethnic lenses to its reading and implementation. That could load the implementation with emotions, prejudices, fear and stigma. For some authors, this happens because “…interests of implementers and evaluators are superficial and temporary, whereas the problems are long-lasting” (Orlovic 2015). Therefore, it is important for the agreement to entail realistic view of the capabilities of the affected society to substantially implement the provisions that have been negotiated. Then, the process of drafting and implementation of the agreement should include international actors, but also local scholars, experts, interest groups and societal stakeholders. In that manner, the process would allow for ownership both for the text of the agreement and for its implementation. The success of the arrangement can then be assessed by the ability of the societal actors to legally, politically and developmentally adhere to its provisions.
Third, if an agreement entails goals that go beyond achieving peace, then it should provide opportunities for conflict transformation – institutional mechanisms that transform the violent conflict into a developmental one. A constitutional reform cannot be successful if it does not set a base for dealing with the immediate triggers of the conflict and acute symptoms. In that sense, agreements should provide avenues for functional and structural power sharing, not a declarative power divide. The simplistic approach to separate and isolate the powers between conflicting parties leads to divergence. The gap that would be created leads to creating a society of bare tolerance, not of acceptance of the differences. In that sense, mediators’ prowess would come to light if agreements are designed to target the conflict root causes and envision their management. Authors claim that a pure consociational or integrative approach cannot be implemented in practice, and pose dangers to multiethnic societies (Norris 2005, Samuels and Hawkins Wyeth 2006). Even systems that heavily relied on one or the other approach have failed significantly. Lack of success can be seen in the examples of Bosnia and Herzegovina and Lebanon which relied heavily on Lijphard’s consociationalism, or Uganda
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and Fiji, which models were largely based on the integrative approach. Therefore, the answer in designing post-conflict constitutional systems should ask for meaningful power sharing, one that includes avenues for cooperation between the sides. Consociational models would set the basis for power sharing between the conflicting groups. In addition, the integrative governance would surpass the differences between the groups, by promoting cooperation in achieving the common goals. Those avenues would be the added value to the system that would lead to developmental changes. In essence, they should include full acceptance and promotion of ethnic diversity, extensive use of all languages, the creation of joint educational programs focusing on multiculturalism and inclusion of all minorities in the societal system.
The purpose of multiethnic societies is to promote and protect diversity, not to create separate and parallel systems. The answer to the question of conflict does not entail ethnically neutral approach. It lies in the creation of a multi-ethnical system where ethnicities’ rights are respected, promoted and protected. The multiethnicism in Macedonian should act as its insignia, an example for the broader region and for future generations. That can be achieved if the Ohrid Framework Agreement is seen as a driver for the creation of a functioning multiethnic society oriented towards development and innovation, which respects the languages, the symbols, and the cultural heritage of all its members. Finally, the legal framework should assist the building of a societal system in which all ethnicities would sense their belonging and build their future.
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Stefan Andonovski ([email protected]) holds a Master of Arts in International Relations and International Economics with Honors, from the Paul H. Nitze School of Advanced International Studies (SAIS), at the Johns Hopkins University. His focus of analysis is the field of conflict management, particularly contextualized to the region of the South-East Europe. He has been a participant and panelist at democratization and leadership seminars in Macedonia, Italy, Bosnia and Herzegovina, Hungary, Montenegro, Austria, Serbia, the Netherlands and the USA. He has also written opinion editorials concerning international mediation and negotiations, as well as constitutional reforms. Stefan’s scope of interests includes bilateral and multilateral relations, democratization of multicultural societies, post-conflict reconciliation and justice. He is active in the civil sector and in youth policy-making. He fluently speaks Macedonian, Serbo-Croatian, English and Italian. In 2013, Stefan graduated in legal studies at the University “Ss. Cyril and Methodius” in Skopje.
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Croatian International Relations Review - CIRRXXIV (81) 2018, 51-68ISSN 1848-5782 UDC 341.17(497-15:4-67EU)DOI 10.2478/cirr-2018-0003
The EU Stabilisation and Association Agreement for the Western Balkans: Between Challenges and Opportunities
Gazmend Qorraj, Gezim Jusufi
Abstract
The role of the European Union (EU) trade liberalisation with the four Western Balkan countres— namely Kosovo, Montenegro, Albania, and Macedonia — is overestimated, as major benefits could be expected mainly from institutional reforms rather than trade creation and economic perspective due to low economic development and a lack of comparative advantages in these countries1. The core issue to be addressed in this article is whether these firms can exploit the opportunities arising from the EU integration process. The aim of this article is to confirm the hypothesis that the Stabilization and Association Agreement (SAA) and trade agreements in the Western Balkans are not sufficient pre-conditions for successful performance and increase of exports by local firms; the main focus should be on the internal performance of firms. The paper analyses and compares the data collected by surveys conducted with local firms in Kosovo in order to measure the impact of the SAA. Finally, the article suggests that in the short and medium run the SAA could support and improve the quality of products, technical standards, and firm competitiveness as a pre-condition for better access to the EU market in the long run.
KEY WORDS:
SAA, EU integration process, local firms, growth, free trade, export
1 In this paper, Western Balkan countries include Macedonia, Montenegro, and Albania in comparison with Kosovo.
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Introduction
Within the framework of the European integration process, the EU tends to create a better environment for the market integration of Kosovo, leading to increased export capabilities, accelerated institutional reforms, and economic convergence2. A number of authors have argued that trade integration will support firm opportunities; therefore, European integration will have a positive impact for old member states but also for candidate countries (Mayhew 1999: 27; Knaack and Jager 2003). Smallbone and Rogut (2003: 54) have concluded that the main opportunities from market integration are new export opportunities in the EU market, achieving economies of scale by employing EU standards, abolishment of trade obstacles, and ensured free trade. Despite the positive effects, the authors also considered the negative impacts, such as increased competition in domestic markets and increased costs due to harmonisation of technical standards. Taking these factors into consideration, the question is whether market integration for the Western Balkans (WB) as an external variable is a sufficient condition for local firms to enter the EU market and exploit these opportunities. Furthermore, Smallbone and Rogut (2003: 54) extended the analysis with the fact that the EU market tends to favour large firms compared to local small firms, which is an additional challenge for the WB taking into consideration the large number of small firms in the region.
In this article, compared to other studies that analyse exporting trends, we instead analyse from a microeconomic perspective using two types of firms in Kosovo: exporting and non-exporting firms. In order to empirically support our analysis, we employed two types of questionnaires, one for exporting firms and one for non-exporting firms. The aim of separating the firms into two groups was to measure the support of the SAA for exporting trends and to analyse the barriers that prevent the second group of firms from exporting at the EU market.
By using statistical packages and obtaining descriptive statistics, the survey enables us to analyse the main factors affecting these firms in accessing the EU market, considering the challenges and specific business
2 The SAA is a mechanism of the EU integration framework that was created in 1999 and advanced in 2003 by including the EU integration components.
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environment in the WB. The survey also will identify why the second group of firms cannot export abroad and thus take advantage of the opportunities through the SAA.
Methodology
According to Aidis (2003), there is a lack of sufficient and accurate data for the firms in transition countries. Ensuring data for these firms is a complex issue. Usually, large number of firms created during the 1990s were not functioning in the market therefore they closed their activity, but these firms were still listed on the Business Registration Authority. Furthermore, McIntyre and Dallago (2003: 1-17) added that the creation of firms is reported, while firm failures are not registered. In this paper, we first perform a literature review to gather data on recent academic and professional papers published by different authors.
Due to a lack of data available on small and medium-sized enterprises (SMEs) in Kosovo, we conducted individual surveys with local firms in Kosovo. The analysis consists of two stages. In the first stage, we selected data for the firms from the Kosovo Customs Authority, but only firms that are exporting abroad; therefore, this was a limitation, as there are not many firms in Kosovo that are exporting abroad. Thus, we could not select firms based on any specific sector. With regard to the regional dimension, we surveyed firms in Prishtina and Gjilani. The second group of firms was selected regionally based in Prishtina and Gjilani as the main cities in Kosovo.
The main approach of this selection was to choose entrepreneurs with better knowledge of the SAA in order to ensure a high rate of response as well as appropriate answers. While compiling the surveys, the aim was to design simple questionnaires and avoid complex questions, such as personal questions and questions related to financial and tax issues in order to address the main questions of the article. Therefore, due to the small number of questions and the academic purpose of the surveys, the
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response rate was almost 100% for both questionnaires and individual questions.
In the second stage, we conducted surveys with the selected firms from the customs authority or “exporters” and the second group of firms or “non-exporters.” We employed a survey of 100 local firms exporting to EU countries as well as 100 local firms operating mainly in the local market. This was done in order to evaluate and measure if the increase of exports is due to the SAA or mainly internal factors of the firms. The surveys were conducted in the period from April to May 2017, as April 2017 marked one year since the SAA implementation in Kosovo. Our paper is also supported by comparing exporting trends of Kosovo firms after SAA implementation based on data from the Kosovo Statistical Agency. The additional comparison was performed by analysing the World Bank Report of 2017. The main limitations of this article are the short period of the SAA implementation in Kosovo and the small sample of the entrepreneurs selected for the survey.
Theoretical background
In this section, we briefly review the main trade theories of different authors with regard to trade liberalization, trade creation, diversion, partial integration, global trade concepts, and intra- and inter-trade industry. During the 1950s, trade liberalisation or free trade between countries was generally accepted as a positive concept by the majority of authors with many benefits, such as reduction of tariffs and quotas as well as elimination of other trade restrictions based on increased economic welfare.
From another point of view, authors such as Jacob Viner (1950: 49), studying trade effects, reported contradictory effects of trade liberalisation, known as “trade diversion effects” are a case in which policy discrimination does not allow low-cost producers from outside of the customs union to enter the market freely despite the higher cost of the partner country’s producers. In contrast “trade creation,” is accepted as positive concept
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in which a high-cost producer is replaced by a low-cost producer of the partner country.
By analysing from the perspective of a small group of countries and taking into consideration a global approach and the impact on all countries, Viner accepted the liberalisation of trade as a “discriminatory liberalisation.” Furthermore, Lipsey (1957: 14) continued with the analysis of trade not only from the production approach but also from the consumption perspective. The trade analysis was further extended with the so-called regional free trade known as “partial integration” between specific groups of countries, which is considered that increases the region’s terms of trade at the rest of world’s expense respectively reduce the world efficiency and create negative effects for the third countries which are not part of a specific customs union (Krugman 1990: 11). On the contrary, global free trade was seen as the “first best solution,” which could maximize economic welfare globally and minimise monopoly positions and negative spillover effects. In addition, it is important to also reflect on the global customs union and which type of union could replace the idea for global free trade. The global customs union will impose similar trade rules for all countries and reduce the negative effects from trading blocks.
Another crucial component of regional integration is inter-industry trade and intra-industry trade, firstly launched by countries of the European Economic Community (EEC) (Hadjinski et al. 2010: 5-7). Specifically, intra-industry trade is crucial for economic growth, as this type of trade means trade of products between similar industries or similar products. Why is this important for economic growth? This type of trade accelerates innovative ideas and innovation trends as well as a large variety of the products supported by economies of scale and competition. In contrast, inter-industry trade is based on trade between different products and different industries supported by comparative advantages of the different countries. Finally, the majority of authors accept that besides the benefits and costs of the different types of market integration, crucial issues for countries are also the structure of their market, identification of comparative advantages, as well as the innovation level of firms in these countries.
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Trade relations and the SAA in the Western Balkans
The violent history of the region during the 1990s and the prolonged transition to market reforms had a negative effect on trade integration. A global financial crisis resulted in prolonged economic slowdown in the WB and had a toll on exports during the last decade. This translated into fewer exports compared to other emerging markets in Central and Eastern Europe, although in 2000 the EU granted autonomous trade concessions to the WB countries. This measure was introduced to support them for around 95% of their exports to enter the Union free of duties and any quantitative limits3. Furthermore, in 2007 these countries joined the Central European Free Trade Agreement (CEFTA 2006).
WB countries have some comparative advantages for a range of their products and services that could penetrate EU markets and beyond. However, they still need to improve their productivity by investing in skills and new technology and to accelerate their exports by introducing new products and following external market trends. The recent trade data suggest that some WB countries expanded their market shares in the EU, of which Serbia and Bosnia and Herzegovina benefited the most due to their larger production base, followed by Macedonia, whereas the other three countries lagged behind. Yet, despite recent expansion of exports, the WB countries remain poorly integrated into EU market.
Some countries are better integrated in the trade channels than others, as measured by a higher share of exports in their gross domestic product (GDP). The main exporting countries from the region are Serbia, Macedonia, and Montenegro, with goods and services exports account for roughly 40% of GDP, followed by Albania and Bosnia and Herzegovina with over 30% share; Kosovo is the last with only 19% share in GDP. Their peers, such as Slovenia, Estonia, Slovakia, and Lithuania, have much larger shares of exports, often exceeding 80% of GDP (World Bank 2017: 5-16).
Now we analyse the impact of the SAA on the capability of Kosovo firms to gain access to the EU market. Although there is a limited period of time,
3 Products originating in the WB countries benefit since 2000 from autonomous trade measures.
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Kosovo has only one year of experience with the SAA implementation. The situation of other WB countries will be reported briefly, as these countries experienced the SAA for a longer period.
Kosovo’s trade imbalances still pose a significant challenge to sustainable economic development. Since 1999 the Kosovo market has been flooded by imports, while exports have been negligible. Kosovo made some progress in improving its business climate to support export-related business activity, but it remains at an underdeveloped stage of market economy, and businesses face numerous constraints in their daily activity. Among those constraints, one should mention trade restrictiveness, weak contract enforcement (especially within the financial sector), and access to finance. The persistent trade deficit and current account deficit reflect a weak production base and poor international competitiveness (European Commission 2016: 5-13). Over 90% of firms in the private sector in Kosovo are either small or micro firms, making the SME sector dominant and very important to promote growth. As such, it is the main employer, accounting for about 80.7% of overall formal employment in 2013, where micro firms (2–9 employees) employed 31.9% as of the same year. This is well above the European average of 67% for the same year. The number of SMEs in Kosovo grew steadily over the past several years, according to the official business registry statistics, with about 10,000 new enterprises registered on an annual basis between 2012 and 2015. However, the largest share of this growth is attributed to the registration of previously unregistered enterprises (going formal), as the informal sector is estimated to be high at around 30%, and many of them are registered as sole proprietorships. Based on 2014 data published by the Kosovo Agency of Statistics, the majority of Kosovo’s firms are wholesale and retail trade companies. This is in line with the popularity of trade activities among small proprietors and is supported by the fact that 37.3% of employment is provided by the trade sector. Manufacturing, on the other hand, accounts for 12.7% of the enterprises and 15.3% of employment, suggesting that these companies have a larger number of employees per company (European Investment Bank 2016: 11-12). The main destination for Kosovo’s exports in 2017 was the CEFTA with 48.3% of overall export of goods, followed by the EU market with 24.9%, other European non-EU markets with 7.7%, and the rest of the world with 19%. The main destination in EU was Germany with 21.4% share in exports to the EU, followed by the Netherlands with 13.5% and Austria
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with 11.2%, with all three growing in the last year. The main destinations in the CEFTA are Albania with 33%, Serbia with 26.2%, Macedonia with 25.1%, Montenegro with 10.9%, and Bosnia and Herzegovina with 4.8% of exports to the CEFTA.
From another point of view, most firms in the WB are not exporters, choosing instead the domestic market as the destination of their products. The majority of Albanian firms (about 87%) are oriented towards the local market, 10% of overall firms export to the EU market, and only the remaining 3% sell to other WB countries. The exporting companies in all countries of the WB region are linked more with the EU market than with the other regional neighbours. Serbia and Kosovo are the only two countries with larger exports to the region compared to their exports to the EU market. Kosovo is also the main importer of Serbian exports to the region. In this article, it is important to also address the reforms undertaken by Kosovo’s institutions towards elimination of trade barriers and other costs for the firms identified by the Doing Business Report (2018) of the World Bank. According to this report, Kosovo is among the 10 economies worldwide that have undertaken significant reforms during 2016 and 2017 compared to previous years. Furthermore, the report explains three main areas in which Kosovo performed deep reforms: simplifying business registration procedures, simplifying credit procedures, and simplifying insolvency procedures (World Bank Group 2017: 5-16).
According to other areas, there is no significant change from past years. Despite the internal challenges of firms, there are obstacles to firms in Kosovo with regard to the business environment, such as costly financing and short-term loan maturity for the firms, improving and sharing credit information, strengthening investor protection, standardising the taxing system, trade across borders, and enforcement of contracts. An additional challenge for firms in Kosovo compared to the region is in relation to the free movement of business people, as Kosovo is still facing barriers to move to EU countries due to visa liberalisation. This is among the main obstacles for networking and partnership with EU firms and, consequently, increases the transaction costs of local firms.
Regarding the SAA effects in the other WB countries, we now briefly describe the impact of the SAA on Macedonia, Montenegro, and Albania.
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Macedonia was the first regional state to sign the SAA. The implementation of the SAA is estimated to have contributed to the acceleration of Macedonia’s economic development and its industrial and agricultural production, as well as the increasingly important service delivery (Secretariat for European Affairs [SEA] of Macedonia 2011: 10). According to the State Statistical Office of Macedonia (2014: 1), immediately after SAA came into force, Macedonia’s exports to the EU began to increase gradually. On the contrary, according to Tosevska (2007: 10), despite having the SAA, Macedonia is experiencing a continuous trade deficit due to a lack of competitiveness in the EU market.
Montenegro adopted the SAA in March 2007. Montenegro recently has also advanced in pursuing fiscal consolidation and improving the business environment. Its trade is also characterised by a smaller amount of imports compared with other regional countries, imports which were gradually deducted after the adoption of the SAA. After the SAA implementation, exports to the EU doubled (Montenegro Statistical Office 2015: 4).
Albania started implementing its SAA with the EU in April 2009. It has made some progress in improving the functioning of the market economy. During 2009–2013, Albanian firms increased their volume of exports to the EU market, while in 2011 there was an increase in imports also. Furthermore, in 2013 exports in the EU market accounted for 76.7% of total exports. This accounted for an increase of 17.3%, while the volume of imports from the EU market for 2013 accounted for 64.3% of total imports and decreased by 0.4% compared to 2012 (INSTAT 2014: 6). Finally, due to a lack of firm competitiveness, there is a permanent account deficit and thus low economic development in Albania (European Commission 2014: 3).
Results
The following section of the article presents the descriptive statistics derived from the analysis. The main results from the survey conducted with the local firms are as follows: first, we analysed the firms exporting in the EU
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market; therefore, the managers of these firms declared that they are well informed about the SAA4. Most of them, around 66.7%, are informed from local institutions such as the Ministry of Trade and Industry, while 28.6% are informed by the local media. Also, 86% of managers have a positive opinion about the SAA; only 14% have a neutral opinion.
Regarding expectations from the agreement, most managers declared economic aspects to be important, compared to 19% who declared that reducing informality in the economy was important. In order to check if the firms benefited from the SAA, we asked if they were exporting before the implementation of the SAA or after it; 86% of managers declared that they were already exporting to the EU market, while only 14% started exporting after the SAA implementation.
Table 1: Main factors supporting firms to export to the EU market
Supporting Factors for Exporting Firms %
SAA 10%
Government policies 19%
Production capabilities 38%
Partnership with EU firms 29% Source: Authors
Regarding the question about the main factors that supported firms to export to the EU market, only 10% of managers declared due to the SAA, 19% due to government policies, 38% due to production capabilities, and 29% due to partnership with EU firms, as described in Table 1.
Furthermore, it was important to analyse the main factors that should improve in the future in order to optimally use the EU market5. Around 20% of respondents declared that human resources are among the main factors, while 24% believe them to be government policies, only 15% rely on production capabilities, and most, around 39%, chose EU financial
4 The results from the survey were obtained using the statistical package STATA and are mainly descriptive statistics.
5 The questionnaire was designed not only to analyze the supporting factors for exporting firms but also to obtain additional information about the level of knowledge of firms about the SAA. In addition, we also surveyed the future needs of the firms.
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support for their SME-s. Regarding future needs towards EU and local institutions, around 15% of respondents declared exchange of experiences as a need, 15% chose economic cooperation, 24% believe that tax-free packages from the government for the firms that export to the EU market are needed, and around 46% think that EU grants are needed for this purpose.
We will continue to explain the findings from the non-exporting firms in order to analyse the difference between exporting and non-exporting firms6. Regarding the information about the SAA, around 78% of respondents declared to have been informed, while 22% declared that they do not have information about the SAA. Of the informed respondents, 66% were informed from the Ministry of Trade, while around 34% were informed by the media7. Regarding expectations of the SAA process, around 25% are neutral, 15% have negative expectations, and 60% have positive expectations. Among the respondents with a positive approach, 70% believe that the SAA has a positive impact on economic reforms, while 30% believe it reduces informality.
Since these firms did not export to the EU market, we analysed the main obstacles. Around 34% of the firms declared that production capabilities are the main problem, 20% rank government policies as the main problem, 24% stated the partnership with EU firms, 10% stated financial support, and 12% stated a lack of human resources and professionals with technological background. As a pre-condition to exporting to the EU market, most firms, or 40% of them, focused on increasing production capacities, followed by government policies at 23%, EU financial assistance for the SME-s around 15%, and human resources at 22%. These factors are described below in Table 2.
6 The questionnaire for non-exporting firms was performed to analyze the barriers preventing these firms from entering the EU market. Also, there is a crucial need to analyze the difference between non-exporting firms compared to exporting firms. From the data, we can see that exporting firms have higher positive opinions about the SAA compared to non-exporting firms.
7 The data in Tables 2 and 3 represent only the current state of firms in Kosovo with regard to opportunities from the SAA. The data for other WB countries will be used from other sources such as World Bank Reports.
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Table 2: Main barriers for firms to export to the EU market
Barriers for Non-Exporting Firms %
Financial support 10%
Government policies 20%
Production capabilities 34%
Partnership with EU firms 24%
Human resources ( technical staff) 12% Source: Authors
In order to extend the analysis, we used the latest report of the World Bank in the table below, including data from 2013 to 2017, thus showing the challenges of these countries to increase their exports. Except for Serbia, the countries of the region experienced relatively small changes of less than 0.5% of GDP in their current account deficits.
Table 3: Goods exports from WB (% of GDP)
WB6 Countries 2013 2014 2015 2016 2017
Albania 10.9 9.3 7.5 6.7 6.6
Bosnia and Herzegovina 24.8 25.1 25.2 25.7 25.6
Kosovo 5.5 5.9 5.6 5.1 5.7
Macedonia 29.2 33.5 33.6 35.2 37.7
Montenegro 11.8 10.3 8.9 8.7 8.4
Serbia 30.7 31.9 33.9 37.0 39.3
WB6 24.0 24.7 25.2 26.7 28.0
Source: World Bank (2017)
According to the World Bank (2017), the results are as follows8: Macedonia increased the volume of goods exported compared to imports, which
8 World Bank estimations measured by obtaining data from local institutions of the WB countries and World Economic Outlook (2017)
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decreased the trade deficit in 2017. In Montenegro, despite tourism opportunities, the volume of exports is still at a low level, while raw materials used for the Bar-Boljare highway are permanently increasing the volume of imports. In Albania, despite increasing the volume of exports, supported by the tourism sector, there is still an unstable trade balance caused by higher energy-related imports and other institutional challenges. Compared to Montenegro, Macedonia, and Albania, the worse situation is in Kosovo due to higher non-equilibrium between imports and exports9. Additional challenges for Kosovo are the structure of the exports, which is not favourable, since the main source of exports is metal bases, which could be considered natural resources, as well as fewer exports based on sustainable production capabilities.
According to the tables above and the explained results, the SAA impact is relatively different in the different countries, although most of the WB countries had higher economic expectations. From another point of view, it is not easy to measure exactly the SAA effects, as the business environment in the WB countries was supported also from the reforms undertaken by the World Bank and other stakeholders within the Doing Business Report framework and other instruments.
Despite the many challenges for these countries, authors such as Kaminski and De la Rocha (2003: 61) have added that the SAA process offers unique opportunities to the WB countries to reform local institutions in line with EU requirements in order to increase institutional efficiency as well as increase the opportunities of benefiting from the EU. Therefore, the SAA framework offers good opportunity to continue integration with the EU. The deepening market integration in the WB will increase the export opportunities and, consequently, market performance, which could lead to trade benefits due to restrictive EU rules of origin and EU MFN tariffs on industrial products. However, deepening market integration depends not only on the WB objectives but also implementation of their structural reforms, as well as the support of EU institutions to continue the European integration process in the region.
9 Table 3 describes the volume of the exports and imports in the WB as a share of GDP, which is around 30%, while in the new EU accession countries it reaches about 80%.
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Conclusion
Despite the opportunities created by the European Union for the WB, there are threats from the open market, especially for small firms. Previous evidence for Central European countries suggests that small firms are not in the best competitive position with regard to the EU market, taking into consideration their limited capabilities, such as higher transaction costs, adaption costs, low level of technology, and low level of cooperation with other EU firms. A similar experience is shared by the WB, specifically Kosovo, taking into consideration additional challenges, such as political disputes with the countries of the region, delay in the SAA implementation, inadequate government policies, production capabilities, financial support as well as human resources, and lack of specialized management.
There is a limitation to this article, as there was only one year since the SAA implementation in Kosovo; therefore, it is very difficult to predict its benefits and costs. Although evidence from our analysis suggests that the SAA framework is an opportunity for firms to access the EU market, due to elimination of trade barriers and other obstacles to trade. In contrary the SAA framework is not a sufficient factor for the firms compared to other internal factors such as firm production capabilities, partnership with EU firms, as well as the introduction of government policies.
From another point of view, the non-exporting firms also declared that the main challenges for the local firms are the lack of financial support, followed by inadequate technical staff, un-sustainable government policies for the local producers, and a lack of partnerships with EU firms. The main conclusion of this article is that the SAA framework in the short run could support local firms and countries to accelerate reforms and improve technical conditions according to EU standards in order to make them capable of accessing the EU market but only in the long run. On the contrary, the pessimistic scenario is that in the short and medium period there will be even more challenges for the local firms due to competitive pressure in local market from European firms. There is intention of the firms, mainly from the new EU member countries to access at the Western Balkans market as these firms have more probability to export to the WB countries market compared to the EU market, where the competition is
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higher due to the higher demand for the qualitative products and services.
The main suggestions of this article for the WB countries are as follows: Kosovo should identify its comparative advantages, increase the competition capabilities of local firms, improve the business environment, and use EU financial assistance more effectively to compete regionally and in the EU market. In addition to economic challenges, the political disputes and political instability in the Balkans have hampered the regional economic cooperation as well as foreign direct investments, outsourcing, and other private initiatives from large firms and companies worldwide.
Albania should increase its competition capabilities in the medium period by continuing with institutional and sectorial reforms. Furthermore, Albania must improve its education system, increase the competitive potential of firms, and improve tax administration and collection (IMF 2016: 20-25).
In order to increase the benefits from the SAA, Montenegro should continue with fiscal reform packages, strengthen tax revenues, and improve the business environment by using tourism opportunities.
Macedonia should work continuously on adapting monetary and fiscal packages and prioritising public investments as well as overcome the political instability, which has led to business uncertainty (World Bank 2017: 55-69).
Finally, taking into consideration the fact that countries respectively firms in the WB did not realised the expected results from trade liberalisation, therefore in order to increase the benefits from trade, the market liberalization should be accompanied with the improvement of the technical standards in production, increase of production quality, better education of managers and offering the creative products and services at EU market.
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Lipsey, R., 1957. The Theory of Customs Union: Trade Diversion and Welfare, Economica, 24: 40-46.
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Mayhew, A., 1999. Recreating Europe: The European Union’s Policy towards Central and Eastern Europe. New York: Cambridge University Press: 27.
McIntyre, R. and Dallago B., 2003. Small Enterprises in Transition Economies: Causal Puzzles and Policy-Relevant Research. Hampshire, UK: Palgrave: 1–17.
Michalopoulo, C., 2003. The Western Balkans in world trade. Trade policies and institutions in the countries of South Eastern Europe in the EU Stabilization and Association Process -Regional Report, 24460: 17.
Montenegro Statistical Office, 2015. Mirror Analysis Summary Report: International Trade in Goods Statistics: Statistical Report, 1: 4.
Qorraj, G. and Jusufi, G., 2017a. Survey conducted with 100 firms exporting at EU and other countries abroad. Main factors supported firms to export at EU market. Republic of Kosovo.
Qorraj, G. and Jusufi, G., 2017b. Survey conducted with 100 firms non-exporters at EU and other countries abroad. Main barriers for firms to export at EU market. Republic of Kosovo.
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Gazmend Qorraj ([email protected]) is an Associate Professor at the Faculty of Economics, University of Prishtina. He received his PhD from the University of Ljubljana in 2009 and an MA in the economics of international trade and European integration in 2004 from Staffordshire University, UK, & Vrije University, Brussels. Since 2001, he has taught at the University of Prishtina. Since 2015, he is the national contact point for the Marie Curie Actions and European Research Council at HORIZON 2020.
Gëzim Jusufi ([email protected] ) is a PhD candidate in economics at the University of Prishtina. He received an MA in marketing in 2011 from the University of Prishtina, and a diploma in business administration in 2009 from Trakya University, Turkey.
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Croatian International Relations Review - CIRRXXIV (81) 2018, 69-90ISSN 1848-5782 UDC 341.231.14:437.991(4)DOI 10.2478/cirr-2018-0004
Right of Access to Supreme Courts in Light of the Guarantees under Article 6 § 1 of the Convention on Human Rights and Fundamental Freedoms (civil aspect)
Nikolina Katić, Matea Bašić, Morana Briški
ABSTRACT
Right of access to a court, enshrined in Article 6 § 1 of the European Convention on Human Rights and Fundamental Freedoms forms one of the basis for reinforcement of the principle of rule of law. However, the right of access to a court may be limited by provisions of national legislation regulating the functioning of the judicial system and rules of judicial procedure. The higher the hierarchy of the court, the more limits may be placed on the right of access to it. The aim of this article is to examine the different modalities of organisation of supreme judiciaries in European countries (members of the Council of Europe) and mechanisms established in national legislation for filtering applications to those jurisdictions in civil cases, in light of the principles set forth in that regard by the ever evolving case-law of the European Court of Human Rights, and the effects of its judgments and decisions on national legal systems.
KEY WORDS
European Convention on Human Rights and Fundamental Freedoms; European Court of Human Rights; right of access to a court; Supreme Court; restrictions
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Introduction
Rule of law and proper administration of justice are some of the fundamental principles of democratic societies and a cornerstone of European democracies. As the President of the European Court of Human Rights (hereinafter: the European Court), The Honourable Judge Guido Raimondi said while opening the 2017 judicial year “[t]he rule of law is what sets Europe apart: it is one of the achievements of our civilisation, a rampart against tyranny. This is what Europe represents: a part of the world where the rules of the democratic game have been laid down, and where compliance with these rules is guaranteed by the Constitutional and Supreme Courts”1.
Indeed, national Supreme Courts play a crucial role in the protection of human rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms (hereinafter: the Convention on Human Rights) within the legal systems of each Member State of the Council of Europe.
In order to be able to benefit from the guarantees of rule of law protected by the Supreme Courts with regard to particular judicial proceedings concerning their rights and obligations, individuals first and foremost need to be able to exercise their right of access to those courts. Without the possibility of bringing their cases before Supreme Courts, the guarantees of rule of law vested in those highest national judicial authorities remain tenuous.
Scope of and limitations to right of access to appellate and cassation courts
Right of access to a court (particularly right of access to courts of higher instances), as guaranteed under Article 6 § 1 of the Convention on Human
1 Raimondi, G., 2017. Solemn hearing for the opening of the Judicial Year, Opening address of the European Court of Human Rights President Guido Raimondi. Available at http://www.echr.coe.int/Documents/Speech_20170127_Raimondi_JY_ENG.pdf [accessed 1 August 2017]
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Rights, is, however, not without its limitations.
Article 6 of the Convention on Human Rights does not compel the contracting states to set up courts of appeal or of cassation. The formation of the national judicial system naturally infers on the states a certain margin of appreciation, allowing them to organise their systems in a manner they see fit. Nevertheless, a State, which does set up courts of appeal or courts of cassation is required to ensure the respect for fundamental guarantees contained in Article 6 to all those who appear before them2.
Different models of Supreme Court jurisdictions in member states of the Council of Europe
The states’ margin of appreciation in organising their judicial systems with particular regard to the highest levels of jurisdiction is particularly evident through the existence of different models set up within the Council of Europe member states. In substance, there are three different models: the cassation model, the revision model and the appeal model, whilst each Supreme Court also has its share of national particularities3. (Lemmens: 2007)
a. Cassation model
Supreme Courts belonging to the first model, the cassation model, deal exclusively with issues of law, not with the facts. “They do not decide afresh the case that comes before them. They can either reject an appeal or quash the decision of the lower court and remit the case for a fresh examination4” (Lemmens: 2007). The Supreme Court is not the court of third or in some cases even fourth instance, so the presentation of parties’ own points of view and opinions on the subject matter of the case are not allowed in the cassation model. Supreme Courts of the cassation model do not adjudicate in cases, but rather exercise control over courts of general jurisdiction and examine whether their judgments
2 Delcourt v. Belgium, ECHR 1970, Series A, No. 11, p. 14. Available at: http://hudoc.echr.coe.int/eng?i=001-57467 [accessed 17 June 2017]
3 Lemmens, P., 2008. “Guidance by Supreme Courts to Lower Courts on the Requirements of the European Convention on Human Rights”. Proceedings of the Regional Conference: The role of Supreme Courts in the domestic implementation of the European Convention on Human Rights, 20 - 21 September 2007 Belgrade. Council of Europe, August 2008:36-52. Available at: https://www.coe.int/t/dghl/standardsetting/cddh/Proceedings/Belgrade_PROCEEDINGS&COVER.pdf [accessed 7 May 2017]
4 Ibid.
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infringe provisions of national legislation. It may thus be said that Supreme Courts belonging to the cassation model act as a link between the courts of general jurisdiction providing them with coherent guidelines on how to apply the law5. (Zembrzuski: 2014).
b. Revision model
Courts of revision, like those of the cassation model, do not deal with facts, but only with matters related to breaches of the law. However, they will render their decisions on merits only if it is possible for them to do so without having to gather new facts. But, if a decision on merits of the case requires additional findings of facts, the Supreme Courts of revision model shall remit the case for a retrial or fresh examination to the competent court.
c. Appellate model
Unlike the previous, Supreme Courts of the appellate model may, in fact, entertain both questions of fact and those concerning the law. The appellate court in this case has the same type of jurisdiction as the (lower) court, which brought the first instance decision. In this model, the appellate court’s judgement replaces the judgement of the lower court, so there is no possibility of retrial or afresh proceedings before any other court6.
Whatever the model, one of the main features that distinguishes the Supreme Courts from lower (ordinary) courts is the fact that Supreme Courts are on the top of the judicial hierarchy. They are therefore expected to “clarify the law, assure its uniform application and adapt the national case-law to ever-changing circumstances”7.
Precisely because of their special role in the national legal systems, the Supreme Courts play a dual role in domestic legal orders, exercising their public and private purpose8. (Jolowitz: 1997) A private purpose could be
5 Zembrzuski, T., 2014. “Access to the Supreme Court – Polish approach”. Colloquium of the procedural law The functions of the Supreme Court – issues of process and administration of justice, 11 - 13 June 2014 Warsaw. University of Warsaw, Faculty of Law and Administration 2014. Available at: http://colloquium2014.uw.edu.pl/wp-content/uploads/sites/21/2014/01/ZEMBRZUSKI_-Access-to-the-Supreme-Court_-Polish.pdf [accessed 1 June 2017]
6 Ibid.
7 See mutatis mutandis Lemmens 2008, cited supra.
8 Jolowicz, J.A., 1997. The role of the Supreme Court at the national level a General Report. In Yessiou-Faltsi P., ed. The Role of the Supreme Courts at the National and International Level, Athens: Sakkoulas Publications.
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defined as “achieving, to the maximum possible extent, the application of justice according to law to the parties to the litigation before the court”9. On the other hand, their public purpose is perceived as wider-reaching, through the reviews of the legality of the lower courts’ decisions and the fact that, the lower courts are ordinarily bound by the precedents and stances established by the Supreme Courts. Moreover, the possibility of quashing lower instances’ judgements, which demonstrate clear and evident violations of the law is, yet another, significant public task exercised by the Supreme Courts.
Many Supreme Courts of the Council of Europe member states position themselves as serving more of a public than a private purpose10. (Norkus: 2015) This is clearly reflected through the existence of various filters imposed with regard to the possibility to appeal to the Supreme Courts in those countries. In this context, the supreme jurisdictions protect individuals far more by providing clear guidance in form of uniform and predictable case-law on specific matters, than if they were to feign review of every application. The regulation of access to the Supreme Court through various filtering mechanisms is ipso facto the result of a compromise between the colliding public and private interests, where, on the one hand, the necessary balance needs to be achieved between parties’ right to a fair trial and the exercise of the principle of the rule of law in their individual case and, on the other hand, the public interest of avoiding unnecessary engagement of the highest national judicial authority.
Limitations of access to the Supreme Courts (filtering mechanisms and models)
The European Court has, on many occasions, held that, “[t]he right of access to the court… is not absolute; it is subject to limitations permitted by implication, in particular where the conditions of admissibility of an appeal are concerned, since by its very nature it calls for regulation by the State, which enjoys a certain margin of appreciation in this regard”11.
9 Ibid.
10 Norkus, R.., 2015. The Filtering of Appeals to the Supreme Courts. Network of the presidents of the Supreme judicial Courts of the EU. Available at http://network-presidents.eu/ [accessed 15 June 2017]
11 Egić v. Croatia, no. 32806/09, ECHR 2014. Available at: http://hudoc.echr.coe.int/eng?i=001-144363 [accessed 17 June 2017]: §48
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Limitations of right of access to Supreme Courts have their practical expression in the form of filtering mechanisms and procedures to be followed in order for a case to be eligible for examination at this, highest level of national jurisdiction.
Filtering mechanisms, models and procedure vary from one country to another. They generally depend on the functioning model of the Supreme Court and its legal position in the national judicial order (in particular with regard to whether a Constitutional Court has also been set up in the country).
For example, a Supreme Court cassation model functions in Lithuania and, as a general rule, cassation appeal is not allowed against judgements and rulings of the first instance courts, if they had not been reviewed by the courts of the appellate instance12. Conversely, in the United Kingdom, Ireland and Norway, Poland, Denmark and Sweden a leapfrog appeal is available. However, in these jurisdictions, right to appeal the judgement of the court of first instance directly to the Supreme Court is granted only in exceptional situations.
The latter model of filtering appeals before the Supreme Court is called the leave-to-appeal system. As mentioned above, the UK, Ireland, Norway, Denmark and Sweden are prime examples of this type of filtration. In these jurisdictions, a principle of pre-selection or selection “at the door” of the appeals to the Supreme Court is applied. The selection of cases to be adjudicated before these Supreme Courts is done on the basis of quite abstract criteria, emphasizing public purposes of the Supreme Court. Specifically, when a decision in a particular case concerns a matter of general importance or the interests of justice, it is necessary for the case to be heard before the Supreme Court. If not so, as a general rule, no substantive reasoning for the decision to refuse leave to appeal is provided.
The power to select the cases to be heard before the Supreme Court is usually vested in the Supreme Court itself (such as Denmark). It is very important to note that countries, which have this kind of filtering of appeals to the Supreme Courts usually do not have separate Constitutional Courts in their jurisdictions.
12 Ibid Norkus: 2015: 9
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The second model of filtration of the appeals to the Supreme Court includes no judicial filtration stricto sensu. This type of filtration exists in France, Belgium, the Netherlands, Estonia, Spain, Greece and Italy. In these countries, the cassation appeal may be brought before the Supreme Court only by a special lawyer assigned to the Supreme Court or one who fulfils certain prescribed requirements of experience. It is, in principle, mandatory for practising lawyers to advise their clients on the possible outcomes and thus act as a type of filter for unfounded appeals to the Supreme Court13.
The third model may be described as a mixed one. It possesses some of the features of both models, occasionally shifting more either to the leave to appeal or to no judicial filtration system. This model is, for example, present in Lithuania.
Jurisdiction model and filtering mechanisms of the Supreme Court of the Republic of Croatia
Government in the Republic of Croatia is based on the trias politica principle of separation of powers into legislative, executive and judicial branches. Judicial power is exercised by the courts. The judiciary is autonomous and independent. The courts administer justice according to the Constitution, international agreements and treaties, which have been signed and ratified and therefore form an integral part of the domestic legal system, laws and other valid sources of law.
The administration of justice in the Republic of Croatia is carried out by courts, including the misdemeanour courts, municipal courts, commercial courts, administrative courts, county courts, the High Misdemeanour Court, the High Administrative Court, the High Commercial Court and, of course, the Supreme Court, as the highest court.
The role of the Supreme Court is to assure the protection of the rule of law and all the rights and freedoms guaranteed by the Constitution. One of its most important roles, inter alia, is ensuring the uniform application of laws and equal treatment of all citizens before the law. Furthermore, the
13 Ibid Norkus: 2015: 11.
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Supreme Court of the Republic of Croatia discusses current issues related to court practice, decides on admissibility and merits of the regular or extraordinary legal remedies in accordance with provisions of national law and decides upon jurisdictional disputes between lower Croatian courts. The Supreme Court also performs other tasks as prescribed by law14.
The Supreme Court performs its function of the guardian of the rule of law (ensuring uniform application of laws and equality of all citizens) mainly through its decisions on appeals. Its decisions in specific cases influence the practice and decision making of the lower courts15.
The achievement of goals set before the Supreme Court and the role it performs in the Croatian legal system is directly connected to the regime of legal remedies, which afford access to the Supreme Court. It is precisely because of its special role and position within the Croatian legal system hierarchy, that not all cases and appeals may be examined before the Supreme Court on merits. The qualities of realisation of the goals set before the Supreme Court are intrinsic to the possibility of access to the Supreme Court by parties. The Supreme Court would be equally prevented from performing its functions if the parties had no possibility of access to the Supreme Court, but also if such possibility was too broad based. In both of these situations the result would be similar – failure and impossibility of the Supreme Court to fulfil its constitutional assignment – to harmonize the domestic courts’ practice and thus influence the consequent development of the domestic law.
Similar to the previously described filtering methods and procedures existent before other European Supreme Courts, the possibility of access to the Croatian Supreme Court is also subject to restrictions. In civil cases, the Supreme Court normally decides upon appeal on points of law (ordinary or “extraordinary”), which has to be filed after the second instance court has brought its (final) decision. Other elements of admissibility are defined through provisions of national civil procedural law imposing specific restrictions on the right of access.
14 Law on Courts. 6.03.2013. NN 28/13, 33/15, 82/15, 82/16. Zagreb: Narodne novine. Available at: https://www.nn.hr/ [accessed 5 June 2017]
15 Crnić, I. “Presentation of the President of the Supreme Court of the Republic of Croatia Ivica Crnić at the demonstration of the new system of publishing case-law of the Supreme Court of the Republic of Croatia”, Supreme Court of the Republic of Croatia, 2003. Available at http://www.vsrh.hr/EasyWeb.asp?pcpid=439 [accessed 12 June 2017]
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Limitations of right of access to courts of supreme jurisdiction in the case-law of the European Court
As previously mentioned, the European Court has clearly stated that right of access to a court as protected under Article 6 § 1 of the European Convention is not absolute. Accordingly, limitations in place for such access are not per se incompatible with the Convention.
However, these limitations must not be of such nature to “restrict or reduce a person’s access in such a way or to such an extent that the very essence of the right is impaired”16 (Guérin v. France 1998); specifically, such limitations will only be compatible with Article 6 § 1 if they pursue a legitimate aim and there is a proportionality between the measures that are being used and the aim that is being sought by those measures.
As often repeated throughout its case-law, the task of the European Court is not to take the place of the domestic courts in the interpretation of national legislation, but rather to verify whether the effects of such interpretation are in line with the European Convention. This is particularly pertinent to the interpretation of procedural rules, for instance those regulating the time-limits for the filing of documents or lodging of legal remedies17.
While considering whether the limitations of access to the supreme judicial authority are compatible with Article 6 of the Convention, one should begin those reflections with the European Court’s acknowledgment that the very essence of the role of the Supreme Court is “to deal only with matters of the requisite significance”18.
The compatibility of the limitations envisaged by the national law with
16 Guérin v. France, no. 25201/94, ECHR 1998. Available at: http://hudoc.echr.coe.int/eng?i=001-58204 [accessed 21 July 2017]
17 See Trevisanato v. Italy, no. 32610/07, ECHR 2016. Available at: http://hudoc.echr.coe.int/eng?i=001-166837 [accessed 17 June 2017]; Miragall Escolano and others v. Spain, nos. 38366/97, 38688/97 40777/98, 40843/98, 41015/98, 41400/98, 41446/98, 41484/98, 41487/98 and 41509/98. ECHR 2000. Avaliable http://hudoc.echr.coe.int/eng?i=001-58451 [accessed 15 June 2017]
18 Dobrić v. Serbia, nos. 2611/07 and 15276/07. ECHR 2011. Available at: http://hudoc.echr.coe.int/eng?i=001-105234 [accessed 17 June 2017]: §45
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the Article 6 of the Convention depends on the particularities of the proceedings in question, and the role of the supreme judicial authority in the national legal order. Nevertheless, the European Court has emphasised that the conditions for the admissibility of the appeal on points of law may be stricter than the ones for an ordinary appeal19. Provisions which regulate the procedure and time limits for lodging an appeal ensure the proper administration of justice. They also serve as guarantors of the principle of legal certainty, therefore, as the European Court pointed out: “Litigants should expect those rules to be applied”20.
In case Trevisanato v. Italy the Court considered whether the conditions for the admissibility of the appeal to the Italian Court of Cassation represent the limitation of access to the court, which is contrary to Article 6 of the Convention. Namely, relevant provisions of the Italian Code of Civil Procedure prescribe that the petitioner must explicitly state the legal principle, which has allegedly been breached. Since the applicant in the Trevisanato case failed to formulate such legal principle, his appeal was dismissed. The Court of Cassation asserted that the lack of appropriate wording as to the point of law at issue, precluded it from identifying the substance of appeal and its reasoning. The applicant argued before the European Court that the decision of the Court of Cassation was excessively formalistic, as the legal issue in question could have been identified from the wording of the appeal.
The European Court established that the legitimate aim of provisions governing the admissibility conditions is to maintain legal certainty, as well as proper administration of justice. It further concluded that this limitation was proportionate, as it did not place an excessive burden on the applicant, who could have simply formulated the legal point in question, enabling the Court of Cassation to respond to it by setting up “regula iuris”, which could be applied in similar issues. Thus, given the specific role of the Court of Cassation in (internal) Italian legal order, the European Court had found that dismissal of the applicant’s appeal on points of law was not overly formalistic in the context of Article 6 of the Convention.
19 See Trevisanto v. Italy: 2016: §34, Khalfaoui v. France, no 34791/97, ECHR 1999. Available at: http://hudoc.echr.coe.int/eng?i=001-58374 [accessed 21 July 2017]: §37
20 See Trevisanato v. Italy, 2016: §32 and Miragall Escolano and others v. Spain, 2000: §33
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Unlike the Trevisanato case, where the European Court established that the impugned rule on admissibility was explicitly articulated in the national law and was not the judge-made rule, in Beles and others v. the Czech Republic21 it found, inter alia, the violation of the right of access to a court because the Supreme Court had the discretionary power of granting the leave to appeal on points of law. Such decision was based solely on the opinion of the Supreme Court on whether the disputed decision raised issues of crucial legal importance. This prevented the applicants and their lawyers from assessing their prospects of obtaining leave from the Supreme Court. In the event of leave to appeal on points of law being refused, there was a risk that the applicants’ constitutional appeal would have been dismissed as being lodged out of time. The European Court concluded that requiring the applicants to lodge appeals with both the Supreme Court and the Constitutional Court on the same grounds would have created legal uncertainty, which had not facilitated proper administration of justice, as it prevented litigants from using an available remedy.
In the case Miragall Escolano and Others v. Spain, the Court deemed that access to the Supreme Court had been denied based on an unreasonable construction of a procedural requirement, which prevented a claim for compensation from being examined on its merits. In this case, the applicants lodged an administrative complaint to the Supreme Court, which was dismissed because it had been lodged outside the time-limit, namely, after the expiry of one year since the delivery of the impugned decision. However, the applicants were not parties in the proceedings in which the decision was taken, and, furthermore, were unaware of it until it was published in the Official Gazette, although the decision itself did concern their interests. The European Court has emphasized that the applicants “must be able to avail themselves of the possibility to lodge an appeal from the moment they can effectively apprise themselves of court decisions imposing a burden on them or which may infringe their legitimate rights or interests”22. Otherwise, the courts could substantially reduce the time for lodging an appeal or even render any appeal impossible by delaying service of their decisions. On such basis, the European Court concluded that domestic courts’ particularly strict interpretation of a procedural rule, deprived the applicants of the right of access to a court.
21 Beles v. the Czech Republic, no. 47273/99. ECHR 2002. Available at: http://hudoc.echr.coe.int/eng?i=001-60750 [acessed 8 June 2017]
22 Miragall Escolano and others v. Spain, 2000: §37
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The issue of deadlines for filing applications to the supreme judicial authority has also been considered by the Court in the case of Tence v. Slovenia23, but with regard to the practical aspect of using means other than personal or postal submission of the appeal on points of law. The applicant submitted her appeal on points of law on the last day of the prescribed deadline using a fax machine, whilst the original document was submitted by regular post the following day. Relying exclusively on the fact that the original document containing the appeal on points of law had been submitted after the expiry of the time limit, and disregarding the fax transmission altogether (finding that the applicant was unable to prove the content of the document sent by fax), the Supreme Court dismissed the appeal as lodged out of time. The Supreme Court also emphasised that any faults in the transmission of a document sent by fax, even if attributable to the court, had to be borne by the party submitting such a document. However, the latter conclusion of the Supreme Court had been based on the case-law developed after the applicant had already filed her appeal on points of law by fax, which is why at the time of filing her appeal by fax there was no basis for her to consider that what was recorded as a successful and timely fax transmission, could nonetheless result in the rejection of the appeal as out of time. The European Court thus concluded that the Supreme Court’s interpretation of procedural rules in the given circumstances was overly rigid, imposing a disproportionate burden on the applicant, which ultimately led to her inability of accessing the Supreme Court.
In certain cases it is not the interpretation of domestic procedural rules governing access to supreme jurisdiction that infringes the individuals’ right of access to a court, but rather the legislation itself, which does not lend itself to any interpretation.
The case of Clionov v. the Republic of Moldova24 relates to the issue of payment of court fees in proceedings before the Supreme Court. In accordance with the national procedural provisions valid at the relevant time, appeals on points of law before the Supreme Court could not be
23 Tence v. Slovenia, no. 37242/14, ECHR 2016. Available at: http://hudoc.echr.coe.int/eng?i=001-163352 [accessed 17 June 2017]
24 Clionov v. the Republic of Moldova, no. 13229/04, ECHR 2007. Available at: http://hudoc.echr.coe.int/eng?i=001-82595 [accessed 17 June 2017]
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subject to any exemption from court fees, regardless of the appellant’s financial situation. This general prohibition of waiving court fees was essentially contrary to the right of access to a court, as guaranteed under Article 6 § 1 of the European Convention.
In a number of cases concerning access to supreme jurisdictions, the European Court has also dealt with the issues of the rationae valoris criteria applied in many European legal systems as one of the filters for accessing supreme jurisdictions. In that regard, the European Court has held that setting the financial threshold for appeals to the Supreme Court is not contrary to Convention per se, as it pursues a legitimate aim of preventing overload of the Supreme Court with cases of lesser importance25. However, the issue of whether the interpretation of the rationae valoris rule, in light of the circumstances of a particular case infringed the right of access to the supreme jurisdiction, remains to be examined on a case-by-case basis.
Recent judgment of the European Court in the case of Zubac v. Croatia26 concerns the lack of access to a court due to a combination of two factors: a mistake made by lower instance courts and, subsequently, an exceedingly formalistic interpretation of procedural rules governing the rationae valoris principle by the Supreme Court. In particular, under relevant Croatian legislation the plaintiff is obliged to indicate the value of his claim in his action. Should he fail to do so, or should the first instance court find that the value stated in the action is clearly incorrect (set either too high or too low), it shall verify the value of the claim at the early stages of the proceedings, before examination of the merits. In his initial action, the applicant’s predecessor indicated the value of his claim lower than the rationae valoris threshold for filing the appeal on points of law. Subsequently, during the first instance proceedings on merits, he raised the initially indicated value over the prescribed rationae valoris threshold, even though he was not permitted to do so under national legislation. Accordingly, the Supreme Court declared his appeal on points of law inadmissible as not meeting the rationae valoris criteria.
25 Bulfacht v. Croatia, no. 53261/08, ECHR 2011. Available at: http://hudoc.echr.coe.int/eng?i=001-105215 [accessed 16 June 2017]
26 Zubac v. Croatia, no. 40160/12, ECHR 2016. Available at: http://hudoc.echr.coe.int/eng?i=001-167114 [accessed 30 June 2017]
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However, the European Court held that the particular circumstances of the case (specifically the fact that the lower courts had calculated costs and expenses of proceedings using the raised value of the claim) lead to the conclusion that the interpretation of procedural rules by the Supreme Court had been overly rigid, in a manner, which imposed on the applicant an excessive individual burden of mistakes made by the lower courts and prevented his access to the Supreme Court.
It is interesting to note that the European Court held that existence of long-term case-law of the Supreme Court with regard to the rationae valoris principle, consistent with the Supreme Court’s conclusion on inadmissibility of the applicant’s appeal on points of law, was of no relevance. This was so because, in the European Court’s view, the inadmissibility of the appeal on points of law was essentially caused by the errors made by lower courts, which contrary to domestic law, acted as if the change in the value of the claim at the later stage of the proceedings was, in fact, allowed and accepted. On that basis, the European Court concluded that the Supreme Court’s interpretation (or rather the ignoring of the lower court’s mistakes) was, “contrary to the general principle of procedural fairness inherent in Article 6 § 1 of the Convention” (Zubac 2017:§ 40).
It is further worth noting that the Chamber adopted the Zubac judgment by four votes to three. In a joint dissenting opinion, honourable judges Lemmens, Griţko and Ravarani found there was no reason to hold that conclusions of the Supreme Court had been contrary to the Convention. In particular, the Supreme Court could not be bound by the (implicit) determination of lower courts with regard to the value of the claim, but rather relied on specific provisions of domestic law and its own long-standing case-law in dismissing the appeal on points of law in this particular case. Dissenting opinion especially critiques the notion of “general procedural fairness inherent in Article 6 § 1”, which was introduced by the majority. Finding this new notion unclear, the minority questioned its connection to the right of access to a court as the only right at issue in this particular case.
Moreover, the minority questioned the majority conclusion that the case concerned mistakes made by national courts, since the initial mistake was in fact made by the applicant’s predecessor who indicated a higher
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value of the claim at the stage of the proceedings at which such action was not allowed. Even though the lower courts did not declare such action unlawful, this could not have created a reasonable expectation of the applicant’s predecessor that his appeal on points of law would have been admissible.
As the Croatian Government’s request for referral of the Zubac case to the Grand Chamber of the European Court was accepted, it remains to be seen what the final outcome of the case will be.
At this point, the content of the European Court’s case-law regarding the issue of access to the supreme jurisdictions shows that the examination of such cases has more to do with individual circumstances of each case (which are naturally of factual nature) than with any general notion, be it the right to a fair trial or “general procedural fairness inherent in Article 6 § 1”, as stated in Zubac27.
Effect of the European Court’s judgments on removing obstacles for access to supreme jurisdictions
Judgments of the European Court have an effect on national legal systems of member states, which greatly surpasses their seemingly declaratory character (and the usual payment of just satisfaction to the applicants in respective cases). In particular, Article 46 § 1 of the European Convention obliges member states to comply with the European Court’s judgments, which relate to them. This is done primarily through the implementation of measures of general character, aimed at eliminating the causes of the violations found, and thus, preventing the possibility of future similar violations of individual rights.
Accordingly, violations of the right of access to supreme jurisdictions found in judgments of the European Court have warranted certain
27 Ibid
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changes, either in the legislation governing the filtering of appeals to these jurisdictions or in the interpretation of these rules by the national courts of the Member State to which a particular judgment refers.
Generally speaking, the scope of measures that may be applied by the states in order to remove underlying causes of the violation of access to supreme jurisdictions is limited to, either legislative changes (when the violation was caused by the content of provisions of relevant domestic laws) or, more frequently, measures that can and should affect the necessary changes in the case-law of domestic courts examining the admissibility of applications lodged to Supreme Courts.
For example, following the findings of the European Court in Clionov v. the Republic of Moldova (merits described above), in order to prevent similar violations of the Convention in the future, Moldovan authorities have amended relevant legislation so that it now provides for the possibility to request exemption from court fees or the deferral of their payment. Under the amended legislation, in case the appellant requests exemption or deferral of payment of court fees, the appeal on the points of law shall not be dismissed and the panel of three judges shall decide whether to grant the request28. Thus, the European Court’s judgment has led to the removal of restriction of access to the Supreme Court, which was contrary to the European Convention.
A similar situation also occurred, with regard to the European Court’s judgment in the case of Miragall Escolano v. Spain (also analysed above). In the process of execution of the said judgment, the Spanish authorities amended relevant legislation setting clear guidelines for the identification of the first day of the time-limit allowed for lodging appeals29. These amendments had led to closure of the examination of the case by the Committee of Ministers, and were clearly an effective method of prevention of similar violations, as there have been no other similar pending cases against Spain before the European Court.
Markedly different, in Tence v. Slovenia, the Government of the
28 Status of execution of judgment in Clionov v. the Republic of Moldova. Available at: http://hudoc.exec.coe.int/eng?i=004-6798 [accessed 21 July 2017]
29 Final resolution of the Committee of Ministers in Miragall Escolano and others v. Spain no. ResDH(2001)158: 2001 Available at: http://hudoc.exec.coe.int/eng?i=001-56011 [accessed 21 July 2017]
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Respondent State deemed sufficient to undertake awareness raising measures, as acquainting of domestic courts’ with the conclusions expressed in the judgment of the European Court shall, in their view, be sufficiently effective for preventing similar violations of the Convention in the future30. Such a stance remains to be assessed by the Committee of Ministers with regard to its effectiveness in prevention of similar violations of the European Convention in the future.
Conclusion
Right of access to a court, guaranteed under Article 6 § 1 of the European Convention, though generally encompassing all levels of national jurisdiction, nonetheless shows some restrictions do apply.
However, such restrictions must not impair the very essence of the right of access to a court. In particular, the Court held that, in order to remain compatible with Article 6 of the Convention, restrictions of the right of access to a court must necessarily pursue a legitimate aim, and the means employed (the limitations placed on the right of access) must be proportionate to the aim pursued. This general rule is applicable to all levels of national jurisdiction, including highest judicial authorities (Supreme or Cassation Courts).
It will be interesting to see how the European Court’s case-law will further develop on the issue, particularly in the case Zubac v. Croatia, which is currently pending before the Grand Chamber, which is expected to provide specific guidelines as to the application of the rationae valoris criteria in access to highest national courts.
30 Action Report of Slovenia in the case of Tence v. Slovenia. 2017. Available at: https://rm.coe.int/168070c4e9 [accessed 31 July 2017]
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Zembrzuski, T., 2014. “Access to the Supreme Court – Polish approach”. Colloquium of the procedural law: The functions of the Supreme Court – issues of process and administration of justice, 11 - 13 June 2014 Warsaw. University of Warsaw, Faculty of Law and Administration 2014. Available at: http://colloquium2014.uw.edu.pl/wp-content/uploads/sites/21/2014/01/ZEMBRZUSKI_-Access-to-the-Supreme-Court_-Polish.pdf [accessed 1 June 2017]
Zubac v. Croatia, no. 40160/12, ECHR 2016. Available at: http://hudoc.echr.coe.int/eng?i=001-167114 [accessed 30 June 2017]
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Nikolina Katić ([email protected]) holds a Law Degree from the University of Zagreb. She also holds a Legal English Certificate from Cambridge University. She is an Assistant Agent of the Republic of Croatia before the European Court of Human Rights and the Head of the Litigation Department. She has extensive experience in representation before the European Court of Human Rights, with focus on cases relating to war crimes and human rights violations in the criminal field. She works as a legal expert on international human rights standards on multiple projects in Croatia and in the region. She regularly gives lectures on the implementation of the Convention on Human Rights as well as the case-law of the European Court of Human Rights in the Croatian legal system for judges, prosecutors and civil servants.
Matea Bašić ([email protected]) holds a Law Degree from the University of Zagreb. She has been a fully qualified lawyer in Croatia since 2006. During her work within the judiciary, she has gained extensive insight and practical knowledge on the national legal system and case-law of domestic courts. Currently, she is an Assistant Agent of the Republic of Croatia before the European Court of Human Rights and the Head of Department for the Execution of Judgments of the European Court of Human Rights. Her area of specialty is the case-law of the European Court of Human Rights and its effects on the national legal systems of Council of Europe member states. As an expert on human rights standards, she maintains ongoing involvement in training activities on the case-law of the European Court of Human Rights and the implementation of its judgments at the national level.
Morana Briški ([email protected]) holds degrees in Law and European Studies from the University of Zagreb and l’Université Paris II - Panthéon Assas respectively. She is currently an Assistant Agent of the Republic of Croatia
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before the European Court of Human Rights and the Head of Department for case-law research at the Office of the Government Agent of the Republic of Croatia before the European Court of Human Rights. She specializes in case-law research and analysis in the field of international human rights. She is a certified HELP trainer and a member of the EJTN’s Human Rights and Fundamental Freedoms Sub-Working Group.
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Croatian International Relations Review - CIRRXXIV (81) 2018, 91-112ISSN 1848-5782 UDC 347:65.011.56DOI 10.2478/cirr-2018-0005
Legal Technology for Law Firms: Determining Roadmaps for Innovation1
Tanel Kerikmäe, Thomas Hoffmann, Archil Chochia
Abstract
The business model of many law firms, as legal professions on the whole, will be facing a considerable paradigm change since the work provided by law firms in the form of billable hours, in fact, largely consists of services which do not require superior legal education but involve mere data procession. It is only a question of time that the consequence – to have all outsourceable services be performed by means of legal technology – will become public knowledge in the branch, as the costs saved by the usage of legal technology are considerable. Legal technology, or Legal Tech, in this context represents a broad range of solutions that affect both lawyers and clients on various levels. However, the discourse on automatisation of law has been scant and sporadic. This paper aims to shed some light on the current operating technical solutions for innovation with the primary aim of explicating the different aims and levels of development of different legal technologies.
KEY WORDS:
automatization of legal professions, innovation, legal technology, law firms
1 This research was supported by the Estonian Research Council grant PUT1628 “The assessment of Estonian national e-government services system in the context of EU’s legal framework of Digital Single Market”, led by Professor Tanel Kerikmäe, Tallinn Law School, Tallinn University of Technology.
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Introduction
In 2016, Linklaters and Pinsent Masons announced their decision to invest in autonomous office automatons, to be more specific, Linklaters has “developed Verifi, a computer program that can sift through 14 UK and European regulatory registers to check client names for banks. The company said it could process thousands of names overnight” (Financial Times 2016). Linklaters and Pinsent Masons are in good company: The latest BDO’s Law Firm Leadership Survey (polling the managing partners and senior partners of 50 leading law firms) states that “artificial intelligence (AI) will have the greatest impact, with many believing it would replace the work of lawyers, or strip out a significant layer of work and revenue from law firms. This will in turn bring about changes to their resourcing mix, business models and financial structures at law firms” (BDO 2017).
‘Artificial intelligence’ as a term requires some specification in this context, as it is often used, especially in media and marketing, as a buzzword of changing content. Also, in the context of the latter reference it is questionable whether BDO’s Law Firm Leadership Survey indeed intends to refer to AI in its technical meaning. In fact, as pointed out by Russell and Norvig (2010), from the perspective of computer science where AI is a subdivision of strong ( human formed) and weak (non-human formed) AI, there are secondary “mimicking thinking and reasoning abilities, without actually having these abilities” (Ben-Ari et al. 2017). In the context of legal profession and legal automatons, and law and tech, any truly human-like acting mechanism is far from being available or even under imminent development, and we thus speak only of weak AI – and this also only in the three fields of machine learning, natural language processing and big data, as there is currently a paradigm change in terms of qualitative processing in this field. While Linklater’s Verify may fall indeed into the category of big data, many other novel kinds of legal software in use right now or under development in the field of Legal Tech simply undertake computational tasks without any “intelligent” component at all.
This does not mean that these many innovative software tools do not essentially contribute to the comprehensive change of the legal service market, as technology is only one of three drivers (Susskind 2014) of this
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change that will combine to transform the legal landscape radically and internationally. This paper thus does not focus only on the AI aspects of Legal Tech, but on all “disruptive technologies which do not support, sustain or enhance the way that lawyers and law firms have worked in the past“ (Susskind 2014). These technologies, however, will fully unleash its comprehensive impact only in combination with two further aspects: One is the growing cost pressures on lawyers, or – in a nutshell – the “more for less challenge”. The second evolves directly from the liberalisation of legal services and, in particular, from allowing non-lawyers to compete on the legal market.
These three aspects form at present quite an unclear amalgam of different and overlapping scenarios, to which this paper intends to shed some light.
Categorising of existing Legal Tech software solutions
Various authors have tried to categorise these developments; this paper presents and compares two of them prior to elucidating its proper perspectives on the issue.
Categorization according to Praduroux
Praduroux et al. (2016) propose eight categories in which legal technology presently advances:
1. Lawyer-to-Lawyer Networks, providing synergies for outsourcing and by the creation of social and referral networks;
2. Document Automation and Assembly (DIY Legal Forms and Contracts), which encompasses the design of systems and workflows that assist in the creation of electronic documents. These include logic-based systems that use segments of pre-existing text and/or data to assemble a new document and could also include the
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so-called smart contracting: In transactions of the traditional type people are “bound” to do, to refrain from or to transfer things of value. In the networked society and in the digital age, transactions do not merely create a binding link but a complex bond or even several of these, some of which may refer to rights and duties. On a more practical account, the creation of rules nowadays need to focus on the protection of immaterial things of value, and control the actions of people and non-corporeal entities in an environment that is basically borderless (Solarte-Vasquez et al. 2016);
3. Practice Management (Case Management for Specific Practice Areas and Legal Billing). Practice and case management software provides attorneys with convenient methods for effectively managing client and case information, including contacts, calendar and meeting information, documents, and other specifics. All that is involved in facilitating automation in law practices can be considered practice/case management software;
4. Legal Research. Legal search engines based on advanced search technology from the fields of artificial intelligence, data mining, and natural language processing, with different characteristics and features are available;
5. Predictive Analytics and Litigation Data Mining. Predictive analytics is the analysis of data through statistical or mathematical techniques that results in meaningful relationships being identified in the data. These results can then be used for better prediction of future events and better decision-making. Predictive modelling of litigation management provides the information needed at the beginning of a juridical process to improve it;
6. Electronic Discovery (also called e-discovery, eDiscovery or e-Discovery), which is the electronic aspect of identifying, collecting and producing electronically stored information (ESI) in response to a request for production in a law suit or investigation. ESI includes, but is not limited to, emails, documents, presentations, databases, voicemail, audio and video files, social media, and web sites – an aspect of eminent importance as the law mandates that all legal evidence need to be uncovered in law suits and the enormity of the task is staggering;
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7. Online Dispute Resolution (ODR) uses technology, especially the Internet, to solve disputes out-of-court through an Alternative Dispute Resolution procedure. There are two basic branches of ODR, both based on different kinds of technology: The first branch may be called technology-based, referring to those systems where technology plays an active role in conducting the dispute resolution. A prominent example of technology-based ODR systems are blind-bidding systems. The technology uses multivariate algorithms to help parties arrive at the optimal outcome. The second branch of ODR consists of technology-assisted solutions referring to the use of technology to augment Alternative Dispute Resolution processes that exist independently of the technology;
8. Data Security Technologies. These are intended to protect confidentiality of data that is exchanged in client/server data transfers. Fundamental to these technologies is the use of proven, industry-standard encryption algorithms for data protection. (Praduroux et al. 2016)
Categorisation according to Rackwitz and Corveleyn
Rackwitz and Corveleyn, the founders of TPR Legal, drafted a “legal innovation matrix”, in which Legal Tech can be distributed into four separate quadrants:
Source: Rackwitz and Corveleyn (2017)
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These four quadrants refer to:
1. Platform: Access to legal services, i.e. IT tools serve as a platform, as for example provided by Neulexa, Lawkick, the Ask-a-Lawyer section of the Rocket Lawyer website, LegalZoom, and LawGives.
2. Network: Creating synergies by making use of networks, which differ from the platform solutions in a way that “network providers offer services themselves in the form of managed services (Thompson Reuters Legal Managed Services) or on-demand staffing (BLP Lawyers On Demand, Axiom Legal, Eversheds Agile, Obelisk Support). Network providers are ideal solutions for managing a sudden spike in work volume, meeting a requirement for specific expertise, or temporarily replacing a team member. The added value lies in their specialty in vetting, preparing, managing, and supporting temporary staff or managed teams. Network providers are ideal solutions for managing a sudden spike in work volume, meeting a requirement for specific expertise, or temporarily replacing a team member. The added value lies in their specialty in vetting, preparing, managing, and supporting temporary staff or managed teams.” (Rackwitz and Corveleyn 2017)
3. Software: Providing software which directly performs legal tasks, i.e. content analysis, organization, search, or delivery, as for example Smartlaw, Tymetrix, Rocket Lawyer and LegalZoom, Flightright and New Street Solutions. Rackwitz and Corverleyn elucidate that “Software solutions within the legal services industry range from new ways to manage and analyse documents (LegalSifter) to analytics that use data to make legal judgements and predictions (Lex Machina, TyMetrix). Software providers can improve efficiency by facilitating and supporting time-consuming tasks like access to information, overview, collaboration, document processing, and document generation. Software providers include point solutions, offering a system for a single issue, and 360 degree solutions (LexisNexis, Wolters Kluwer, and SAP)” (Rackwitz and Corveleyn 2017); and finally
4. Know-How: Managing, creating, and delivering information, as for example provided by Bloomberg Law, Thompson Reuters Practical Law Company or Wolters Kluwer (and their recent acquisition of Smartlaw), who basically provide tools facilitating legal research for legal practitioners.
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Comparison and practical significance
While Praduroux et al. (2016) apply a rather linear approach in their categorisation, Rackwitz and Corveleyn (2017) to a large degree include the findings of Praduroux in their matrix, making it more advanced also owing to its functional approach. As they point out in their research as well, the matrix focuses on alternative service providers rather than the lawyer’s profession as such (who would serve tasks within all four quadrants). Within these categories, so far the branches of legal research, discovery, and document generation (respectively category 2, 4 and 6 in the Praduroux classification) have been proving most profitable for both alternative legal providers and traditional lawyers – led by legal research where machine automatisation started to play a role as early as in the mid-1960s, before for-profit companies like Lexis and Westlaw started establishing their practice in the 1970s (Terry 2008). In our days, “the application of machine intelligence to discovery resulted in global market revenue of $3.6 billion in 2010 ($1.1 billion in software and $2.5 billion in services), with growth to $9.9 billion anticipated by 2017 ($2.5 billion in software and $7.4 billion in services” (McGinnis and Pearce 2014). Rackwitz and Corveleyn also report an exponential growth of document generation as a Legal Tech target: “LegalZoom, Rocket Lawyer, Nolo, and Law Depot, among others, offer online consumer and small-business services using machine intelligence. Major financial players have entered the market with Permira and Kleiner Perkins owning an interest in LegalZoom and Rocket Lawyer raising funds from Google Ventures,” resulting in the fact that already in 2011 more than “20 per cent of new California limited liability companies were formed using LegalZoom” (McGinnis and Pearce 2014).
The ethical dimension
The steady growth in online services is not only caused by economic interests of the providers of legal services. In the US, for instance, the National Center for State Courts published a paper outlining the need for state-by-state legal help portals that would not only provide information about legal issues but also guide a user through the entire process of determining their issue, choosing a path to take, and navigating this path to resolution. The article reports a 2010 study of the American Bar Association (ABA), which finds that an increasing number of people
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are using online searches to find a lawyer for a personal legal matter. In particular, younger adults are especially likely to rely on online searches for finding a lawyer, while very few of those over 65 would use the Internet to find a lawyer (ABA 2010). Other studies were carried out in Canada, Australia and the United Kingdom. The Canadian group Community Legal Education Ontario (CLEO) surveyed legal service providers in Ontario to assess the services they provide to laypeople and the new initiatives they have promised. The Ontario legal services providers reported problems with online legal help and, in particular, that their clients are not able to easily find and make use of online information (CLEO 2013). In Australia, researchers in Queensland studied how technology is being used to deliver legal services in community legal centres. The outcome was a great potential of Internet-based services but the current models “are not sufficiently user-friendly or effective, in part because they are structured around lawyers’ ways of addressing legal issues rather than the mental models of laypeople going through a problem” (QAILS 2014). Researchers at University College London (UCL) have conducted several studies on how technology-based legal help tools are used by laypeople in Great Britain. One study found significant growth in adults’ use of the Internet to obtain information about problems with a legal dimension (Balmer at al. 2011). However, it also revealed some problems and in particular that young people had the most difficulty in finding useful and correct legal information. The UCL research team followed up with a study focused on young adults’ use of the Internet to find legal help (Denvir et al. 2011).
This research shows that online legal services also serve clear non-profit legal purposes and serve society from a social aspect. Margaret Hagan from Stanford Law School and Stanford Institute of Design has categorised these needs as follows:
1. Government/Court-Sponsored Information sites that elucidate the law and respective legal procedures, and which explain eligibility for receiving services;
2. Non-profit Legal Services Referrals/Information sites that help a user to determine their personal legal issue is and what local services are available;
3. Private Legal Information sites that help users understand what the
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law says about certain topics. These include sites that present articles and answers on legal issues, as well as more lawyer-focused tools that provide in-depth research tools and summaries;
4. Legal Services/Eligibility sites that present screeners to determine what legal service or paths users might be eligible to pursue. Often these are run by non-profit or start-ups; and
5. Private Legal Self-Help tools that not only provide the user with information but that also assist them in getting forms completed or even to settle their dispute without going through the courts at all. (Hagan 2016).
It can thus also be assumed that lawyers may face in this sense an ethical obligation to use low-cost or even free legal assistance software, as “clients will be able to more easily afford the legal representation that they need in other aspects of their lives” (Arruda 2017) if lawyers are able to maximize their time in providing more information and better service faster for their clients.
Problems of practical implementation
Already today computers are able to structure legal knowledge and regulate technologies in terms of clarifying the sources of legal norms and their hierarchical order; analyse lawyers’ arguments from the angle of presented values and principles, and, using the big data method, analyse the textual interpretative methods and their applicability in practice; categorise the cases, ‘hard cases’, and pick up the elements from reasoning influenced by extra-legal elements; and finally, be “fact-determiners” when processing digital(ly) legal documents (Kerikmäe and Särav 2017).
Providing an example from Estonia – which pursues to improve juridical (e-)services and abandon the outdated modus vivendi – Indrek Teder, former Estonian Chancellor of Justice, introduced his start-up company
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Avokaado, which enables the clients to create drafts of standard legal documents, such as contracts, online. He claims that the goal is to make regular forms more easily accessible and affordable (The Baltic Course 2016). Teder, who currently works as an attorney at law, believes that the field of traditional legal services is a late bloomer in terms of implementing innovation and stresses that “it is no longer acceptable to ask for a tailor-made price for standard solutions” and suggests that the area of legal services will change dramatically within the following years (The Baltic Course 2016).
The question is thus not whether to “allow” AI based software and digital innovation to enter into legal space, but rather how to determine the rights and duties of the stakeholders on the new type of playground.
Even though the potential and demand for automated lawyering is steadily growing, no real breakthrough – as it has occurred in sales (Amazon, eBay) or the social media – has taken place yet in practice. McGinnis and Pearce (2014) have identified three main reasons: “First, because machines will not speak in court for the foreseeable future, oral advocates will continue to enjoy a lucrative niche, although machines may reduce the number of disputes by creating a convergence of litigants on the value of a case. Second, those lawyers who are in highly specialised areas subject to rapid legal change, like Dodd-Frank regulation, will be relatively unaffected, because machines will work best in more routinized and settled areas. Third, counsellors who must persuade unwilling clients to do what is in their self-interest will also continue to have a role, since machines will be unable to create the necessary emotional bonds with clients.” (McGinnis and Pearce 2014).
In a globalised world, the potential of uniform automatisation of law further depends on the geographical location (i.e. a specific legal system). To concede with King (2011), “laws vary substantially from one jurisdiction to the next, such that content or services may be legal in one jurisdiction and unlawful in another. This variation creates a tremendous demand for geolocation technologies that can accurately screen users by jurisdiction, so as to allow online vendors to do as much business as possible without breaking the law” (King 2011).
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Reidenberg (2015) is rather blunt by adding that “technologically-created ambiguity challenges sovereign jurisdiction,” and believes that the use of ICT-tools per se creates excessive tension between conservative justice and a lot more liberal digital world. Geographical location is problematic in segregated jurisdictions such as the European Union and the Digital Single Market, which the Union is struggling to effectuate in cooperation with the Member States. Still, the regulation of already existing or potential e-technologies and e-services in reasonable abstractedness may constitute a considerable challenge itself, but it will certainly require less effort in regard to efficiency of legal technology than considering 28 national legislative peculiarities.
Perspectives
Today we are faced with an abundance of “law practice software products” that are mutually applicable for their software2, including streamline, clouding, built-in reminder and invoicing systems and calendars, but also those that administer certain legal areas.
Yet, the main discourse still concerns the controversial term AI – especially in terms of legal justification, promptness has remained similar to what Turing had in mind (thinking machine vs imitation of human mind, see Turing 1950). As pointed out above, even in its weak form, AI has sparked in legal fields only imminent practical relevance in the area of big data.
Big data
Big data usage is defined as a “generalized, imprecise term that refers to the use of large data sets in data science and predictive analytics. (…) First, it refers to technology that maximizes computational power and algorithmic accuracy. Second, it describes types of analyses that draw on a range of tools to clean and compare data. Third, it promotes the belief that large data sets generate results with greater truth, objectivity, and
2 See examples at http://www.capterra.com/law-practice-management-software/.
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accuracy” (Crawford and Schultz 2014). In the context of strong AI, big data can help to overcome one of the most striking current shortcomings of AI – that immense dataset possessed by human intelligence which we simply call “common sense”, i.e. knowledge about how data relate to each other. From a legal perspective, that aspect of “common sense” is so far of less relevance, as the merely quantitative gap between the amount of data which legal service software today proceed from and the virtually unlimited potential of big data represents already a sufficiently challenging task to be tackled by software. Amongst others, a well-known device serving these functions is IBM Watson3, which analyses unstructured data and selects the most important information from documents by using natural language processing and machine learning. Nevertheless, IBM Watson has today several implementations outside of law area and it is used only as a form of augmented human intelligence4 – it is not intended as an intellect system in the sense that it is meant to complement human activity through computer-human interaction whereas decision-making remains in the hands of humans, as a strong AI. One could draw a parallel here with how calculators initially worked in the hands of engineers and architecture professionals (Xia and Maes 2013). In law practice and legal science, machines like IBM Watson can contribute to faster and more effective (time-wise) research by grasping, collecting and analysing the data based on entered inquiries, although its intellect is limited to operating only upon commands.
Nevertheless, big data as such has a prominent impact on the legal profession from an entirely different perspective, as big data does not only provides for opportunities but, from a client’s perspective, also far more risks in terms of data privacy and data leakages of litigation-sensitive data. As it is the lawyer’s main task to professionally analyse and consecutively enforce and/or protect the client’s interests, a “prudent attorney should advise against a client’s needless dissemination of vast amounts personal information that could potentially be used by another to the client’s detriment” (Segrist 2015) and thus comprehensively inform the client on the nature and risks of big data and advise him to take respective measures.
3 See the description and official website at https://www.ibm.com/watson/.
4 The conceptual framework for augmenting human intellect was initially introduced in the early 1960s by Engelbart (1962), where it was referred to as increasing the human intellectual capacity to approach and solve particular problems. See his original work Augmenting Human Intellect: A Conceptual Framework at http://www.dougengelbart.org/pubs/augment-3906.html/. Engelbart’s work has been customized to contemporary human-computer interface by a joint work by scholars of Cambridge and MIT (Xia and Maes 2013).
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Big data as a source itself is legally (and also technologically) less novel as it seems – as it has always been the case with access to data, handling these data appropriately when making legal decisions “involves an understanding of how they work, what inferences can be drawn and how these can legitimately feed into decisions and actions. It also involves transparency in order to enhance accountability, ensure accuracy and guard against illegitimacy” (Bennett 2014).
Natural Language Processing
As language is the lawyer’s main course and main tool, the technological advancements in the field of natural language processing will have a deep impact on legal professions. However, beyond dictation technology – which already today replaces secretaries’ tasks to a large degree – software is not sufficiently advanced yet to autonomously overtake legal writing. Still, once deep learning mechanisms will have reached a critical point of autonomy, there will be a comprehensive interplay with natural language processing skills as well, as both are closely related – “the difference between NLP and machine learning is the added value from interactions with human behavior, human language, and even human biases and other psychological traits” (Ben-Ari et al. 2017).
Deep learning
Finally, deep learning concerns a central field of legal work – development experience – by doing which results in continuing professionalisation. ROSS Intelligence5, for instance, which has been built on IBM Watson’s platform and works on a research basis, relies on direct inquiries in a question form, but provides immediate answers while at the same time being an independent learning system. Similarly to Watson, it is simply a supporting system, leaving the legal justifications to the command giver by default, but the system’s proficiency exponentially increases by practice itself (and not by external updates, as usually practiced).
The central question is how far the core of legal work and lawyering – genuine legal reasoning – may be replaced by a machine like Watson
5 See more about the ROSS from its official website at http://www.rossintelligence.com/
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as well in near future. Lippe and Katz do not think so, but “nevertheless, software systems, like the aforementioned ones, are potential reduction or exclusion means in the process of systematisation of legal order. Even though computers can be ridiculed in the sense of them ever replacing legal decision-makers, they can be rather successful in structuring the legal knowledge” (Lippe and Katz 2014). According to Lippe and Katz (2014), they could:
1. Explicate the sources of legal norms and their hierarchic order and find contradictions and overlaps;
2. Analyse lawyers’ arguments from the viewpoint of presented values and principles by using the “big data” method and by that move closer to a solid and valid system of values;
3. Analyse the methods of textual interpretation and their applicability in practice;
4. Categorize cases, difficult cases and pick out elements from the arguments that were influenced by legally external facts; and
5. Be “the identifier of facts”6 for processing the digital legal documents.
A comparison with lawyer’s daily work shows that these tasks encompass the essence of legal work, which leaves the lawyers a question as to what their intrinsic function could still be after these tasks have been taken over by deep-learning enabled machines.
One aspect where a human mind will keep its supremacy for a long time is rooted in the general distinction between law as authority and law as legitimacy; the more sophisticated cases are to be decided, the less the concept of law as authority will be able to exclusively provide comprehensively convincing answers. When now “legal services are delivered by technological portals enabled by Al and legal solutions algorithms are proprietary, which version of law will prevail? It is easy enough to embed prescriptive codes of ethics into the parameters of such algorithms, but what of normative principles of transparency? When
6 A term used by Dewitz more than two decades ago, see Dewitz (1995).
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legal thinking is increasingly hidden within inaccessible algorithms that drive seamless service delivery, is it sufficient to rely on the service provider to disclose the mechanisms by which decisions are being made? Or is it preferable to engage a human legal professional bound by rules and standards derived from normative ethical principles to work alongside the technology?” (Coulson 2017). These rhetorical questions succeed to draft an already quite defined field of needs for human legal reasoning – adjusting the outcomes in terms of transparency. For legal professionals, this perspective points out a growing need for specific expertise not only in “holistic” legal fields such as legal philosophy and comparative law7 – a trend which could, also in legal education, shift the significance of these disciplines, taught today merely as adjacent courses (if at all), into the core fields of legal education.
Conclusion
For more than fifty years, automatisation of legal services has occupied a growing share of the tasks of legal professionals, resulting in today’s situation in which especially discovery, legal search, generation of documents, creation of briefs and memoranda, and predictive analytics are, to a sufficient degree, technically performable by machines. Lawyers welcome these technologies for the cost-effectiveness (time, human resource), and the society appreciates new mechanisms as they help to avoid the extra-legal elements in the process of ensuring the rule of law (politics, ideologies) and – beyond that – also provide for a better predictability of legal decision (legal certainty) (Kerikmäe et al. 2017).
On the other hand, the century-long and still continuing success of the business models of traditional law firms (which keeps motivations for reform low), strictly hierarchic structures in these law firms (which are today usually led by non-digital natives) and the inherent interest to keep law and legal advice in a way opaque and obfuscated to gate-keep the monopoly on these services have till this date prevented reasonable adaptation to
7 Further on the need for reforming the teaching of comparative law, see Hoffmann 2014.
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technological potentials. Besides, many lawyers intuitionally (and rightly) fear that computers may, at least partly, replace them and carefully accuse engineers for creating positivistic agents that are not capable of evaluating human values, ethics and the “living nature” of law (Kerikmäe and Särav 2017; Kerikmäe et al. 2016).
As excellent as these results may be, one has to agree with McGinnis and Pearce that “mixing in human intelligence may assure the best possible result. (…) Therefore, the disruptive effect of machine intelligence will trigger the end of lawyers’ monopoly and provide a benefit to society and clients as legal services become more transparent and affordable to consumers, and access to justice thereby becomes more widely available” (McGinnis and Pearce 2014). This is a vision which, as much the society as such would profit, at first sight seems daunting to the practical legal profession. But also from a lawyers’ point of view automatisation will lose much of its threatening aura if one realises that automatisation is – as all technological progress has been for all professions – less the end and rather a transition to new forms of work and new kinds of tasks to which adaptation will always be possible to those who seriously pursue it. The categorisation of legal technologies should become a relevant factor not only in the context of lawyer-client relationship (clarity of benefits and risks), but also for legal professionals among themselves, as different digital options described in this article have distinct capacities and aims. Finally, one should be careful to market every digital solution as Artificial Intelligence; a clear categorisation and division of the technologies used would bring clarity in Legal Tech, which to many still seems as a mystified parallel world which threatens to swallow the traditional set-up of lawyers’ services. This would reduce the ambiguity and confusion that is understandable in the situations where innovation does not (yet) have firm frames.
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Dr. Tanel Kerikmäe ([email protected]) is a full professor of law and has been contributing to the research of European law and policies. He created a European Union legal and policy research group of that received significant funding from EU Commission (H2020, Jean Monnet Centre of Excellence), NATO, Folke Bernadotte Academy, USAID etc. Many of these grants are focused on developing legal digital skills as a tool for European integration. Tanel has been editor of several books (published by Springer, Ashgate, Kluwer, Oxford and Cambridge publishers) such as “Regulating eTechnologies in the European Union” and “The Future of law and eTechologies”. His recent scholarly articles include topics on European digital single market, automatization of legal reasoning and big data, legal impediments to new technologies and use of augmented and artificial intelligence in legal practice and its influence to European stakeholders.
Dr. Thomas Hoffmann, PhD ([email protected]) is Associate Professor of Private Law at Tallinn Law School, Tallinn University of Technology, Estonia. He passed his first state exam in law (2005) and also received his PhD at the University of Heidelberg (2006) before he obtained an LL.M. from Jagiellonian University in Kraków (2009). After his admission to the German bar in 2008, he worked as an associated lawyer at an international law firm in their offices in Kiev and Berlin, before he became research fellow at the Institute of East European Law in Kiel, Germany (2009). In 2011, he relocated to the University of Tartu (Estonia) to become appointed DAAD Lecturer in Law (until 2016). Thomas’ research focuses not only on comparative private law—especially contract and consumer law—but also on intellectual property law and, to a certain degree, citizenship issues in Central and Eastern Europe. A list of his publications is available at http://bit.ly/1fz4RkT
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Dr. Archil Chochia ([email protected]) is a researcher at Tallinn Law School of Tallinn University of Technology and a managing editor of Baltic Journal of European Studies (ISSN 2228-0588). Dr. Chochia obtained his doctoral degree from Tallinn University of Technology in 2013, while he has previously studied at University of Scranton, USA and Tbilisi State Medical University, Georgia. He has more than 70 academic publications as articles in peer-reviewed academic journals, chapters in books, doctoral dissertation and conference papers. He is a co-editor of the books “Political and Legal Perspectives of the EU Eastern Partnership Policy” (Springer, 2016) and “Brexit: History, Reasoning and Perspectives” (Springer, 2018). His research fields of interest are Human Rights, the European Union, EU integration, EU Neighbourhood policy, Law and Technology.
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An Analysis of Public Debt Servicing in Zambia: Trends, Reforms and Challenges
Talknice Saungweme, Nicholas M. Odhiambo
Abstract
The main goal of this paper is to discuss the dynamics of public debt servicing – both domestic and foreign – in Zambia, tracing the trends, reforms and challenges over the period from 1964 to 2015. The paper shows that the exceptional rise in public debt servicing obligations in Zambia over the period under review has been principally due to high domestic and foreign interest rates, frequent debt rescheduling at commercial rates, and capitalisation of non-liquidated service obligations at commercial rates. Also revealed in the paper is the fact that prior to 2005, Zambia experienced severe public debt servicing problems which eased after 2006 owing to debt relief initiatives and an economic rebound. Among the government debt service reforms discussed in the paper are structural adjustments in foreign exchange management, fiscal and monetary reforms, and aggressive engagement of traditional creditors. Primary among the identified challenges of public debt servicing in Zambia was the insistent economic crises that dogged the country during the study period. Notwithstanding the current public debt service sustainability and remarkable economic performance that characterise the country today, the paper found that the recent contraction of nonconcessional loans by the state poses a threat to debt service sustainability in future. Hence, the paper recommends, among other things, for aligning of public sector infrastructure spending with revenues to ensure budget sustainability, and to continue diversifying the economy to minimise the impact of external commodity price shocks on the economy.
KEY WORDS:
public debt servicing, economic growth, Zambia
Croatian International Relations Review - CIRRXXIV (81) 2018, 113-136ISSN 1848-5782 UDC 336.27(689.4)DOI 10.2478/cirr-2018-0006
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Introduction
In theory, the debt overhang hypothesis asserts that public debt servicing depresses economic growth via a multiplier accelerator effect through various mechanisms: (1) it drives up domestic interest rates, thereby increasing the cost of borrowing, which then crowds out private sector investment; (2) it causes a net flow outwards of domestic resources (comprising of external grants, aid and foreign exchange resources) in the form of foreign public debt repayments; (3) it presents future tax uncertainty and a deterioration in domestic policies, which directly impact on real returns on investment; (4) it increases government participation in domestic capital and money markets, which can then lead to credit rationing; and (5) it increases the government’s appetite to borrow so as to service its debts, among other reasons (Clements, Bhattacharya and Nguyen 2003; Krugman 1989; Metwally and Tamaschke 1994; Patenio and Tan-Cruz 2007; Sachs 1989).
However, the results of empirical research by Chowdhury (1994), Elbadawi, Benno, and Njuguna (1996); Fosu (1999), and Pattillo, Poirson and Ricci (2004), among others, reveal that there is no evidence supporting the negative linkage between public debt servicing and growth in studied countries. These contradictory results indicate that there are some systematic variations in the cost of public debt servicing across countries, varying also over time. Extending the discussion to Zambia will assist the country in its debt service management and in policy formulation, given the drive by state authorities to transform the country into a prosperous upper middle-income country by 2030.
Historically, the evolution of the Zambian public debt has been a result of sagging world copper prices in the mid-1970s until the late 1990s, which caused substantial decline in both economic growth rates and central government revenues from mineral taxation and exports (McCulloch, et al., 2000). The persistent rise in (i) budget deficits (see Appendix), (ii) domestic and international interest rates on debt, and (iii) rolling over of domestic public debt between 1975 and 1991 made Zambia one of the highly indebted poor countries in sub-Saharan Africa (Thurlow and Wobst 2006; McCulloch et al., 2000). The high public debt stocks (domestic and
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foreign) translated into unsustainable public debt service obligations. Consequentially, the huge budget outlays towards public debt servicing in Zambia had been perceived as one of the hurdles to the country’s economic growth process and also to poverty alleviation (Government of the Republic of Zambia “GRZ” 2008). Regrettably, the high domestic public debt service payments were not being transformed into productive uses by the recipients; thus, these allocations were an impediment to sustainable economic growth and development in Zambia (Bigsten and Kayizzi-Mugerwa 2000). Of much concern is the fact that between 2007 and 2014, national budget allocations for Zambia’s domestic public debt servicing have consistently been rising relative to those allocated for new capital spending (Southern African Development Community “SADC” 2015).
Against this background, the aim of this study is to analyse the evolution of government debt servicing in Zambia since 1964 by highlighting debt service trends, reforms and challenges. The paper attempts to examine the heavy burden that government debt imposes on the country’s development prospects. The rest of the paper is arranged as follows: Section 2 presents an overview of the Zambian economy; Section 3 discusses the trends in public debt service in Zambia; while Section 4 reviews the public debt service reforms in Zambia. Finally, Section 5 discusses the challenges facing public debt service management in Zambia and Section 6 concludes the paper.
Overview of the Zambian economy
Since the early 1900s, the Zambian economic performance has been largely concentrated in two economic sectors: mining (mostly copper) and agriculture (mostly maize and tobacco). While the mining sector is predominantly capital-intensive, using modern technology, the agricultural sector is principally labour-intensive, using traditional methods (United Nations 2016). According to the United Nations (2016), construction and transport industries have since 2010 also been characterised by capital-intensive production methods and their contribution to the country’s economic growth has been on the rise. Generally, the economy of
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Zambia is heavily dependent on copper mining, which accounts for over 70% of the country’s total export earnings, but employing less than 2% of the population (Central Statistical Office “CSO” 2016). Unemployment and underemployment rates in Zambia stood at 7.9% and 10.2% as at end of 2015, with the highest proportions of people employed in the agriculture, forestry and fisheries industries (World Bank 2016).
As of 2015, the Zambian economy was considered one of the fastest-growing economy in sub-Saharan Africa, characterised by robust economic growth rates averaging 6.9% between 2005 and 2015, driven mainly by unprecedented high commodity prices (GRZ 2017). With a per capita gross domestic product (GDP) of around US$ 1,700 in 2015, Zambia is now a lower-middle-income country (World Bank 2016). However, a combination of declining world mineral prices, particularly of raw copper, and inadequate production and supply of industrial enablers such as electricity, lowered the economic growth rates of Zambia beginning 2015, which recorded a 2.9% growth rate relative to 7.6% in 2012 (GRZ 2017). Inflation in Zambia averaged 11.4% and 9.9% between the periods 2006-2009 and 2011-2015, respectively (GRZ 2017). Following the slump in world commodity prices by the end of 2014, the fiscal deficit of Zambia worsened, increasing from 2.4% of GDP in 2011 to 9.4% of GDP in 2015, thus necessitating increased public borrowing, both domestic and foreign, to fund expansionary fiscal policies (World Bank 2016).
Trends in public debt servicing in Zambia
The huge stock of government debt, public and publicly guaranteed, in Zambia since the 1970s brought about solemn implications for the country’s debt servicing obligations and general economic performance as it directly affected credit creation, national gross savings, national gross investment, and central government gross revenue performances (Clements, Bhattacharya and Nguyen 2003). The active presence of the government in the domestic capital markets in the early 1990s, in addition to foreign borrowing, not only affected domestic interest rates and also crowded out investments, but also brought about severe tax reforms to
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raise revenue for debt servicing (Clements, Bhattacharya and Nguyen 2003). According to Atique and Malik (2012) and Tasos (2014), a high public sector debt service obligation reduces the private sector incentive to invest, which leads to negative economic growth. Figure 1 indicates the trends in public debt service ratios in Zambia during the period from 1978 to 2015.
Figure 1: Public debt service growth trends in Zambia (1978-2015)
Source: SADC Statistical Year Book (2015); World Development Indicators (2016)
RGDP = Real Gross Domestic Product GNI = Gross National Income
PDS = Total Public Debt Service GR = Government Revenue
Public debt servicing trends in Zambia can be split into three phases: (i) 1980-2005, (ii) 2006-2015 and (iii) 2016 and beyond. While the first two phases are visible in Figure 1, the third phase gives a public debt servicing forecast for Zambia based on past and present trends in public sector borrowing and on the general economic performance of the country. In the first phase, 1980-2005, the debt service burden of Zambia was rising exponentially, reaching its worst peak between 1990 and 1996. During this phase, Figure 1 portrays a deteriorating debt service payment capacity of Zambia as signified by the persistent fall in public debt service-to-exports of goods and services ratio. As manifested in Figure 1, between 1991 and 1994, the ratios of public debt service-to-GNI, public debt service-to-exports of goods and services, and public debt service-to-revenue were at their worst in the country’s history -- and so was economic performance (GRZ 2006b). While Figure 1 shows a lower public debt service-to-GNI and public debt service-to-export of goods and services ratios between 1987 and 1990, scheduled debt service was actually much higher (World Bank
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2015). The government’s policy of putting a ceiling on foreign public debt servicing contributed to the noticeable fall in the debt service ratios between 1987 and 1990 (World Bank 1993: 60).
During the period of 1985 to 1996, Zambia’s average annual growth rate was 0.29% (World Bank 2012). The observable spikes in 1991, 1994 and 2003 in Figure 1 are a result of drastic shifts in political regimes (1991 and 2003) and of substantial economic and financial structural reforms (1991, 1994 and 2003). These years, 1991, 1994 and 2003, are associated with the lowest growth rates of the period, that is, -0.04%, -8.63%, and 3.3%, respectively (World Bank 2012).
Phase two, 2005-2015, is characterised with considerable reductions in public debt stock owing to the debt relief initiatives that started in 2000. As indicated in Figure 1, the period is associated with declining public debt servicing ratios. The reduction in public debt service burden after 2000, especially on foreign public debt, boosted public savings and investment prompting increased physical infrastructure and human capital development, which then led to an economic rebound beginning 2006 (Bigsten and Kayizzi-Mugerwa 2000). During this phase, economic growth and inflation averaged 6.9% and 10.6%, respectively, and the fiscal position of the country improved significantly (GRZ 2017).
Also depicted in Figure 1 is the new twist of public debt service ratios, which began trending upwards after 2012 due to renewed domestic and foreign public borrowing, debt roll-over and gradual deterioration in international copper prices (United Nations 2016). Consequentially, Zambia’s risk of foreign public debt service distress, according to the IMF debt sustainability analysis, changed from low to moderate after 2012 (IMF 2015). Consequently, phase three provides a futuristic outlook of Zambia’s public debt service burden, which is expected to be increasing with the level of the country’s output by 2020 (IMF 2014a). As government indebtedness increases, possibilities are that Zambia’s public debt service commitments after 2020 will be financed by distortionary means (like seigniorage), especially if existing gross national investments fail to yield meaningful returns (IMF 2014b). Moreover, although all of Zambia’s public debt sustainability indicators are expected to remain below the IMF and World Bank applicable thresholds until 2020, the public debt
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service-to-government revenue ratio is expected to exceed the 18% IMF/ International Development Association baseline threshold (IMF 2015). Table 1 and Table 2 provide a comparison of Zambia’s foreign public debt service payments in the pre- and post-Highly Indebted Poor Countries (HIPC) periods.
Table 1: Public debt service payments of Zambia (Pre-HIPC era) (1990-1999)
Foreign public debt (US$ millions)
Foreign public debt service (US$ millions)
Foreign public debt service/ Foreign public debt stock (%)
1990 7,237 647 8.9
1991 7,271 718 9.9
1992 6,971 678 9.7
1993 6,791 522 7.7
1994 6,583 541 8.2
1995 6,859 590 8.6
1996 7,181 453 6.3
1997 6,758 376 5.6
1998 6,862 315 4.6
1999 5,950 386 6.1
Sources: BOZ Annual Reports (various), IMF Country Reports (various) and Budget Speeches
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Table 2: Public debt service payments of Zambia (Post-HIPC era) (2000-2015)
Foreign public debt (US$ millions)
Foreign public debt service (US$ millions)
Foreign public debt service/ Foreign public debt stock (%)
2000 5,831 169 2.92001 5,771 158 2.72002 6,684 148 2.22003 5,286 151 2.92004 7,080 211 3.02005 4,528 302 6.72006 2,513 96 3.82007 1,189 121 10.22008 1,982 130 6.62009 3,638 137 3.82010 3,202 135 4.22011 3,544 139 3.92012 4,281 121 2.82013 5,318 101 1.92014 6,170 101 1.62015 7,805 109 1.4
Sources: BOZ Annual Reports (various), IMF Country Reports (various) and Budget Speeches
From Table 1, it can be observed that in the pre-HIPC era, foreign public debt service payments were all above US$300 million annually, an amount too high for a country already suffering from balance-of-payment challenges and incessant government revenue constraints (World Bank 2012). Despite being insignificantly proportional to total foreign debt stock, the foreign public debt service disbursements constituted a significant percentage of the overall government revenue (CSO 2005; World Bank 2012). A period high debt service ratio of 9.9% was recorded in 1991, when the country made a once-off payment of US$300 million to the World Bank, thereby clearing all its debt service arrears to the institution, with the intention of normalising relations and also as a gesture of subscribing to the Bank’s sponsored new economic reforms (Andersson, Bigsten and Persson 2000; World Bank 1993). On the contrary, foreign public debt service payments between 2000 and 2015 averaged US$144 million annually, owing to the debt relief initiatives extended to Zambia by its creditors (World Bank 2015). In essence, it can be construed from Table 2 that the HIPC and Multilateral
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Debt Relief (MDR) initiatives generated huge savings for Zambia through a reduction in foreign public debt servicing commitments.
Generally, prior to the debt relief in 2005, the average foreign debt-to-GDP ratio was 154%, meaning that the Zambian economy had no capacity to generate sufficient financial resources to pay back its foreign financial dues (African Development Bank “AfDB” 2010; Thurlow and Wobst 2006). The remarkable rise in public debt service burden in Zambia between 1987 and 2000 had been predominantly due to rising inflation, high domestic and foreign interest rates, not merely additional government borrowings (Dinh, Adugna, and Myers 2002). Inflation in Zambia rose rapidly from the late 1980s reaching a peak of 186% in 1993, and averaging 97.6% between 1987 and 1993 (World Bank 2003). Domestic interest rates on both lending and government securities averaged 72.8% between 1990 and 2000, with a period peak of 143.5% in 1993 (Thurlow and Wobst 2006). Foreign interest rates on debt between 1987 and 2000 averaged 53.3% (World Bank 2003). Given the dwindling government revenues due to depressed copper prices and de-industrialisation, unredeemed public debt securities were recapitalised at the going high market interest rates, thus worsening the debt levels and repayment ability of the government. In terms of foreign debt service payments’ composition, half of the money was going towards interest payments while the remaining small balance was channelled towards principal debt repayment (Copestake and Weston 2000). Figure 2 shows the trend in public debt interest payments in Zambia between 1990 and 2000.
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Figure 2: Foreign public debt interest payments in Zambia (1990-2000)
Source: Bank of Zambia Annual Reports (various)
Figure 2 reveals that interest payments on foreign public debt were on average US$300 million between 1990 and 1995 and constituted approximately 50% of the total debt service payments (World Bank 2003). Compared to the average annual central government revenues during the period 1990 to 2000, the foreign public debt service payments indicated in Figure 2 represent a high proportion of the country’s budget expenditure (CSO 2005). From a historical point of view, Zambia’s interest payments due on outstanding foreign public debt were on average US$120 million annually between 1986 and 1991 (World Bank 1993: 60) and US$237 between 1990 and 2000 (World Bank 2003). This means that the high world interest rates of the 1990s exacerbated the foreign debt service burden of Zambia by blowing up interests on outstanding foreign public debt, principal and arrears.
The foreign public debt service payment reduction visible in 1993 in Figure 2 was due to the Paris Club debt pardoning initiatives (BOZ 2002). According to the HIPC Report of 2000, Zambia spent approximately 20% of its GDP on foreign public debt service payments between 1990 and 2000, relative to 3% and 2% allocated to education and health sectors, respectively (BOZ 2002). This massive disparity in budget allocation between foreign public debt service payments and social sectors explains the direct effect
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of huge foreign public debt repayments on economic development in Zambia between 1990 and 2000.
Historically, Zambia’s debt service burden increased progressively in the early 1990s, before declining steadily after 1996. Whereas the downward trend in interest payments on debt after 1995 was an indication of severe economic crisis and revenue constraints, the drastic fall in the public debt payments noticeable in 2000 in Figure 2 was a result of massive debt relief from the Paris Club and Bretton Woods institutions (World Bank 2001). Following the debt relief and subsequent economic recovery, Table 1 assesses the foreign debt burden and debt sustainability of Zambia in the post debt-relief era -- the bigger the ratio, the higher the debt problem.
Table 3: Foreign debt sustainability ratios of Zambia (2005-2015)
Indicator Foreign debt/GDP
Foreign debt/Exports
Foreign debt/
Government revenue
Foreign debt
service/Exports
Foreign debt service/
Government revenue
Indicative threshold 40% 150% 250% 20% 18%
2005 86.7 215.6 56.8 11.2 4.0
2006 43.4 56.7 46.8 3.5 3.2
2007 23.8 59.3 48.4 2.6 2.6
2008 21.2 58.2 41.2 3.2 2.1
2009 23.8 82.7 65.6 3.7 2.4
2010 20.4 57 57.7 2.9 1.8
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Indicator Foreign debt/GDP
Foreign debt/Exports
Foreign debt/
Government revenue
Foreign debt
service/Exports
Foreign debt service/
Government revenue
2011 24.3 48.1 49.1 2.1 2.2
2012 27.7 42.8 82.3 2.4 6.8
2013 26.9 56.7 94.3 3.4 7.1
2014 28.2 61.8 101.1 4.1 7.3
2015 38.7 54.2 97.6 3.8 6.9
Source: African Statistical Yearbook (various editions), Central Statistics Office (CSO) (various issues), Bank of Zambia Annual Reports (various years)
The foreign public debt relief initiatives extended to Zambia by its traditional creditors eliminated the country’s public debt service distress by 2006, and both foreign debt to-GDP and foreign debt service-to-exports ratios fell to within baseline thresholds. The proportion of the country’s export revenues committed to foreign debt service was reduced from 11.2% in 2005 to 1.9% in 2010, as shown in Table 3, thus widening Zambia’s fiscal space. As revealed in Table 3, Zambia’s debt sustainability ratios since 2006 fell to within indicative thresholds, meaning that the country could no longer qualify for additional debt relief under MDR initiative.
More so, the debt and financial crises in Zambia’s major creditor economies, and the subsequent implementation of austerity measures by these countries, contributed to the reduction in new debt flows to Zambia, leading to marginal decrease in foreign public debt-to-GDP ratio in 2010, as revealed in Table 3. Nonetheless, faced with little room to pursue counter cyclical interventions, Zambia diversified its foreign sources of finance by issuing Eurobonds in 2011 (Zambia Institute for Policy Analysis and Research “ZIPAR” 2015). In 2012, the government of Zambia
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issued 10-year US$750 million worth of Eurobonds, and collectively, the amount increased to US$1.75 billion by 2015, bringing the total foreign debt to US$6.3 billion at the end of August 2015 (United Nations Economic Commission for Africa “UNECA” 2016; ZIPAR 2015). The Eurobond funds were to fund expansionary infrastructure development and rehabilitation, mostly road and rail networks, energy generation, and transmission and central government hospitals (Ministry of Finance and National Planning “MOFNP” 2013). The issuance of these Eurobonds contributed to the rise in foreign public debt-to-GDP and foreign debt-to-government revenue ratios after 2013.
With a foreign public debt to GDP ratio of 38.7% in 2015, as indicated in Table 3, relative to the 40% indicative threshold of the IMF/World Bank; and a combination of (1) the Zambian Kwacha depreciation against major trading currencies, (2) emergence of current account deficits in 2015, and (3) reduced export earnings caused by the decline in commodity prices and low manufacturing production capacity; the country’s chances of experiencing debt repayment problems in future are on the rise. Between 2006 and 2014 Zambia had been recording current account surpluses (GRZ 2017). These adverse developments in the Zambian economy require the government to continuously seek external balance-of-payment support and to implement appropriate longer-term budgetary measures to ensure public debt service payments sustainability in future.
Furthermore, Table 3 also shows that although the Zambia’s foreign debt service to government revenue ratio is within the IMF sustainability range, it is actually on the rise. With the maturing of Eurobonds and newly contracted nonconcessionary loans, the country’s foreign debt service costs are likely to double by 2020 (IMF 2016). Also, the rising international interest rates on debt are expected to aggravate the debt repayment challenges of the country in the foreseeable future (World Bank 2015).
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Public debt servicing reforms in Zambia
The high government debt in Zambia – both domestic and foreign – prior to the debt reliefs, directly implied massive debt service obligations for the country. Zambia’s exceptionally high government debt service costs emanated from soaring domestic and foreign interest rates, poor performance of the domestic economy, frequent debt rescheduling at commercial rates by creditors, and the capitalisation of non-liquidated service obligations at commercial rates (Andersson, Bigsten and Persson 2000). By the late 1970s, Zambia was already in a serious foreign debt service trap, which prompted the government to undertake debt service reforms. In 1973, 1976, and 1978, the government negotiated a series of contractual agreements with the International Monetary fund, the World Bank and the Paris Club with the intention of easing public debt payments and enhancing economic performance (World Bank 1993). However, these agreements failed to serve the purpose because of transitory terms-of-trade respites and rising poverty levels (Andersson, Bigsten and Persson 2000).
Between 1980 and 1986, the government of Zambia re-negotiated for a more orchestrated and coordinated foreign public debt servicing package with its traditional creditors, mostly the Bretton Woods institutions and the Paris Club (World Bank 1993: 59). However, in 1981, for instance, an Extended Fund Facility, which had been negotiated with the IMF, broke down and was replaced by a new set of debt rescheduling agreements beginning in 1983, particularly with the Paris Club and the London Club commercial banks (GRZ 2006a).
Upon realising that the adopted reforms were not reducing the debt servicing obligation of the country and that the foreign payments were drawing substantially on scarce financial resources that otherwise could be used to advance national developmental programmes, the Zambian government revised its financial, structural, and economic reforms. Consequently, in 1987, the country adopted regulatory policies as evidenced by the implementation of a 10% ceiling on foreign public debt payments in a move meant to tame resource outflow (Bigsten and Kayizzi-Mugerwa 2000). Even though the country’s economic performance partially improved and stabilised, this 10% foreign public debt servicing
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restriction policy caused Zambia to be isolated economically as most creditors substantially reduced the flow of foreign aid and other forms of support to the country (Organisation for Economic Co-operation and Development 2011).
In 1990, the Zambian government implemented a policy which set a limit on foreign public borrowing, in addition to adopting IMF-supported structural adjustment measures. These IMF measures came as a result of Zambia’s arrears in servicing its debts to the institution. To resume foreign public debt servicing, particularly to the IMF, the country subscribed to the IMF’s “rights accumulation programme” initiative, which stipulated clearance of outstanding foreign debt arrears (IMF 2001). The period between 1995 and 1999 was characterised by somewhat firm adherence to the Enhanced Structural Adjustment Facility and the foreign public debt servicing conditions set out by the World Bank and the IMF (World Bank 2002).
The domestic public debt service reforms in Zambia comprised major shifts in fiscal and monetary policies along with structural and institutional reforms. The prime objective of these policy shifts was to reduce government expenditures and mobilise more financial resources to service both domestic and foreign debts (GRZ 2006b; Chileshe and Kafula 2015). Following the abrupt depreciation of the exchange rate due to reduced export earnings caused by the waning in commodity prices, and the subsequent economic decline, the government in 1987 disregarded the foreign exchange auction system and revalued its local currency (Bank of Zambia “BOZ” 2012, Chirwa and Odhiambo 2016).
In response to the high domestic public service costs in the late 1980s and early 1990s, the government turned to seigniorage and instituted the Public Service Reform Programme, which resulted in the restructuring of state enterprises. During the period 1988 and 1993, for instance, the average annual inflation of Zambia was 143%, with a peak of 186% recorded in 1993 (World Bank 2003).
In 1993, the government adopted a cash budget system in which cash was released to line ministries only if adequate funds were available in the government’s main bank accounts to meet the required payments; and
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the government also began to redeem its local debt with the assistance of an increased proportion of concessional foreign borrowing (World Bank 1993; GRZ 2006c). In 2014, the government reintroduced the cash budget system in which government ministries and arms’ expenditure were supposed to be limited to the disbursed funds (GRZ 2013).
Challenges facing public debt servicing in Zambia
Public debt servicing challenges being experienced by the government of Zambia are rooted in economic and financial policy choices, global financial developments, and scanty foreign direct investment inflows since 1964 (World Bank 2000). According to the African Forum and Network on Debt and Development (AFRODAD) (2011), primary among the challenges of public debt servicing in Zambia is the insistent economic crisis that dogged the country from the 1970s until the late 1990s. The other fundamental cause of Zambia’s increasing inability to service its public debts was the narrowness of the economy’s production base, which constrained the revenue base of the central government (IMF 2005: 9). As a result, the government would divert a substantial proportion of received aid to build foreign currency reserves for payment of foreign arrears (IMF 2007: 2).
Although there has been sound improvement in macroeconomic policies and credible public debt servicing management strategies in Zambia since 2000, there still is need for greater diversification of the economy, expansion of the export base, and improvement in government project appraisals in order to maintain public debt stocks and government service payments within sustainable ranges, especially in the face of rising nonconcessional public borrowing commencing 2012 and also of the possibilities of external financial and economic shocks (IMF 2016).
The high nominal interest rates experienced between 1987 and 1996 made repayment of domestic public debt very difficult in the late 1980s and early 1990s (GRZ 2006c). These high rates of interest caused structural
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imbalances as the interest cost of outstanding domestic public debt exceeded primary fiscal surpluses (BOZ 2002). As a result, after 1994, the government was unable to meet the financing of both maturing domestic debt and the interest due on the securities (GRZ 2006a). Moreover, the servicing of local-currency denominated public debt was adversely affected by both the government’s limited capacity to tax and the small size of the country’s tax base (MOFNP 2004). This, in addition to ineffective tax collection strategies, loss-making state-owned enterprises, and massive capital outflows, are among the reasons that assist in explaining the evolution of public debt and subsequent debt repayment difficulties during the period prior to 1999 (IMF 2000).
According to the United Nations Conference on Trade and Development (UNCTAD) (2012), the collapse of the world commodity market beginning the mid-1970s, especially of unprocessed copper, compelled the Zambian government to over rely on foreign and domestic public borrowings in a bid to uphold high levels of government spending. The undiversified Zambian economy caused the country’s revenue sources to remain susceptible to external shocks, especially highly volatile world commodity prices (IMF 2010). Generally, during the period between 1987 and 1999, increased foreign public debt servicing costs offset overall improvements in export performance (IMF 2000). As a result, central government revenues continued to be subdued, falling below recurrent expenditures and foreign public debt servicing obligations (IMF 2009a, 2009b). Thus, foreign debt servicing problems in Zambia were mainly influenced by high and volatile world interest rates and weakening in the country’s terms of trade. More fundamentally, foreign public debt servicing difficulties and currency mayhem in Zambia since 1987 led to sharp increases in defaults and the emergence of non-performing loans in the financial sector (World Bank 2000). The rescheduling of foreign public debt payments by creditors through the so-called Paris Club arrangements proved not to be a solution to the servicing obligations of the country, as evidenced by the persistent presence of servicing challenges prior to 2005 (BOZ 2010). In conclusion, most of the discussed debt service challenges disappeared after 2006 following massive debt relief and tremendous economic recovery.
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Conclusion
This paper has discussed the public debt service dynamics in Zambia, from 1964 to 2015. In the discussions, it was highlighted that the dynamics in world commodity prices, particularly of copper, have predominantly determined the trends, reforms and challenges in public debt service in Zambia over the period under review. The paper identified three distinct episodes of public debt servicing in Zambia: (1) 1980 to 2005; (2) 2006 to 2015; and (3) 2016 and beyond. In the first episode, the country was facing high debt servicing costs emanating from both huge non-concessionary debts and high interest rates. In the second episode, the debt service costs of Zambia decreased radically following the HIPC and MDR debt relief initiatives and also owing to high economic growth rates. The third phase provided an overview of Zambia’s future debt service sustainability. In this third phase, the paper revealed that, if the government fails to expand its revenue base by diversifying the economy, the country is likely to face liquidity and solvency challenges. Among the discussed debt-service reforms, there were exchange rate policy changes, economic structural adjustment policies, and active engagement of the international creditor community through contractual agreements. The paper further revealed that the country’s major debt service challenges emanated from, among other things, a narrow government revenue base, high and volatile interest rates, and exceptionally high government debt stocks. Going forward, the paper recommends that the government of Zambia (1) embarks on stringent austerity measures that limit both domestic and foreign public borrowing, so as to curb the accumulation of high interest payments on public debt; and (2) improves its fiscal position, by aligning public sector infrastructural spending with revenues to ensure budgetary sustainability; and (3) continues with the diversification of the economy so as to minimise the impact of external shocks, particularly in terms of rampant fluctuations in world commodity prices.
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APPENDIX
Fiscal deficit and real GDP growth in Zambia (1964-2000)
Source: World Bank 2003
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Talknice Saungweme ([email protected]) is a PhD student in economics at the University of South Africa with interdisciplinary research interests in public sector economics, international economics and macroeconomic policies. His career goal is to contribute positively to macroeconomic policy development, mostly in low-income countries and in emerging economies. He holds a Master of Science Honours degree in Economics and a first-class Bachelor of Science Honours degree in Economics, both from the University of Zimbabwe.
Nicholas M. Odhiambo ([email protected]) holds a PhD (Economics) degree from Stellenbosch University (South Africa). His research has over the years focused on the dynamic linkages between the various macroeconomic policies in developing countries and their effect on economic growth and poverty reduction. He has a strong bias towards sub-Saharan African countries, which are currently ravaged by low levels of economic growth in per capita terms and high levels of poverty. He is currently working at the University of South Africa (UNISA) as Professor & Chair of Macroeconomic Policy Analysis (MPA) research flagship programme.
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Book Reviews
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Sabina Lange, Zoran Nechev, Florian Trauner (eds.)
Resilience in the Western Balkans2017. European Union Institute for Security Studies. Pages: 143, ISBN: 978-92-9198-627-9.
Recent turmoil and changing geopolitical landscape of the Western Balkans is becoming again a challenge for European security. In the most trying time for the European Union (EU) since its beginning, the issue that was thought to be solved is turning into a potential stability threat. After the final dissolution of Yugoslavia, NATO entrusted the peacekeeping task to the EU, which was eager to make a global statement that security of Europe and its wider neighborhood is the EU’s responsibility which can be autonomously handled. The signing of the Stability Pact in 1999 was one of the first steps in EU integration of the Western Balkans and was an indicator of future EU stability strategy for its southeast neighborhood. The successful integration of Central Europe in the 2004 enlargement wave, where most of the countries were post-communist, was enough evidence for the EU to pursue the same pattern for the Western Balkans. However, the Western Balkans region was not to be compared with Central Europe given the extremely violent military conflicts and deep internal issues in most countries of the region. The oversight resulted in a long accession process characterised with difficult impediments for candidate countries that has enabled penetration of other geopolitical players interested in increasing their influence in the region. Furthermore, stability, as well as democracy, built on reaching the accession terms during the integration turned to be fragile and easily disrupted.
Therefore, the EU found itself in a position where it simultaneously needs to respond to terrorism, illegal migration, assertive Russian actions in the East, but also to security challenges in the Western Balkans such as a growing sense of extremism and radicalism, Macedonian political crisis, further deterioration of interstate relations and foreign fighters. In an attempt to adequately handle highly complex demands, the EU introduced the term of resilience in 2016 Global Strategy (EUGS) as a new approach and policy guideline for addressing the pressing issues in Europe and beyond.
“Resilience in the Western Balkans” offers a deeper analysis for
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understanding the concept of resilience outlined in the 2016 EUGS and is in particular valuable for the proposition of the potential ways of implementation in the Western Balkan region. This report offers comprehensive insight into both geopolitical set up of Western Balkans and internal issues affecting wider regional stability. All relevant factors for security of the Western Balkans, from external influence to civil society analysis, have been examined from two points of view. This perspective, where authors allowed those factors (or actors) to be perceived equally as drivers of fragility and resilience gives this report and additional value of objectivity.
Editors, Lange, Nechev and Trauner, arranged the report in two sections. First, analysing external and second, internal drivers of fragility and resilience in the region. Both sections maintain the same form of the article what offers a clear overview of the main arguments and easier understanding of the matter.
In the first chapter, Corina Stratulat analyses the role of the EU, as a key actor in stabilisation of the Western Balkans. More importantly, she questions the probity of the EU integration as a main stability mechanism that tolerates omissions in democratic consolidation. Rosa Balfour examines the future of the EU accession process of the Western Balkan countries due to its recent lukewarm engagement in the region in comparison to growingly active geopolitical actors in the region such as Russia, the Gulf States, China and Turkey. The current decline in the EU’s presence in the Western Balkans is a consequence of the fact that the member states are focusing on internal issues such as: dealing with Brexit and migration crisis but also addressing terrorist attacks, slow economic development and the rise of populism. Therefore, Germany has indicated the start of Berlin Process as a special agenda for dealing only with the issues and challenges of the Western Balkans. Tobias Flessenkemper analyses the role of it in building the resilience. Also, he gives the overview of other frameworks of cooperation, such as Chinese 16+1 platform, and their impact on building the resilience in the region.
The North Atlantic Treaty Organisation (NATO) is still considered as the most important security provider in Western Balkans despite slight decrease in its presence in the region during the last decade. Sandro Knezović
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analyses its importance in building the resilience, current approach and possible change of it in order to maintain the position of the region’s key security provider. Return of geopolitics made international community shift its focus again on the Western Balkans. Dušan Reljić analyses Russian approach towards the region that came under the spotlight after the events in Ukraine. Reljić presents the exact numbers and facts where Russian influence is to be perceived as a threat. His main argument is, presented more deeply in a chapter, that Russian growing influence through religion, culture, gas supplies and a seat at the Security Council, can hardly overpower the fact that Western Balkans and the EU are one single security space. President Trump also made the statement that the US is determined to promote Euro-Atlantic partnership and support further enlargement towards the Western Balkans in order to become integral part of Europe, what Ivan Vejvoda is analysing through an overview of US’s approach towards the region. Anastas Vangeli analyses growing investments from China, as a potential driver of both fragility and resilience. Vangeli keeps the optimistic view of possible EU – China cooperation in maintaining stability in the region due to its importance for accomplishment of Chinese interests regarding the Belt and Road Initiative. Filip Ejdus in his chapter examines to what extend Turkey and the Gulf States can compete with the EU with their growing investments, as well as the nature of their further intentions and influence.
In the second section, where internal drivers of fragility were analysed, Florian Bieber successfully targeted factors that since the 1990s have the greatest influence on the national political and economic situation and courageously points out the population as the main driver of resilience. Srdjan Cvijić in his chapter argues that “stabilitocracy” supported by the EU, failed to build such civil society that would be the core of resilience in the region.
“An empowered civil society is a precondition for a successful EU enlargement process and a more resilient Western Balkans region. In a situation where parliaments are severely marginalized by, and judiciary subservant to, the executive power, civil society is the only hope for a functioning system of checks and balances.” (Lange et al. 2017)
Igor Bandović and Nikola Dimitrov examine the relation between the EU
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and Balkan political elites with authoritarian characteristics by stressing out the effects of this correlation on future accession processes of the remaining candidates and overall regional development. Alessandro Rotta analyses key segments which need to be strengthened in order for Balkan countries to fully develop an integrated society, which is in Rotta’s view a core of sustainable security. Ana E. Juncos analyses ‘principled pragmatism’ as a new foreign policy principle adopted in 2016 EUGS which introduces a more pragmatic attitude of the EU’s foreign policy and represents the basis for actions regarding building the resilience, in particular in the Western Balkans. Predrag Petrović and Florian Qehaja deal with the phenomena of foreign fighters that is an alarming concern for wider European security and offer concrete recommendations on the issue instead of a conclusion of the chapter. Julija Sardelić analyses the impact of the 2015 migration crisis on the Western Balkans by trying to optimistically present arguments for enhanced regional cooperation during the crisis. Such arguments can be critically reviewed considering the military force, walls and fences on national borders during the crisis; however, the attempt to present migrant crisis as a driver of resilience is rather refreshing.
In the final chapter, Thanos Dokos disassembles the very concept of ‘Western Balkans and the EU - a single security space’ and highlights the necessity of indivisibility of the European security. Such la fin represents the perfect conclusion of the report by pointing out all common security challenges and picturesquely stressing the fact that European security is inevitably inseparable from the security of the Western Balkans.
The value of the report is in the recommendations offered by every author, either throughout the chapter or as a conclusion, why it can serve as a valuable handbook for policy makers, besides being interesting read for all dealing with the current situation in the Western Balkans and possible development of events. It can be argued that this analysis is only tackling the factors affecting the stability in the region, which can be analysed much deeper due to their complexity. However, the success of this report is in the fact that all authors hit the core and gave precise insight in all relevant factors implicating the Western Balkans security. Moreover, besides precise geopolitical analysis of the region, ongoing political processes and the mentality of political elites have been authentically
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presented, making the report comprehensive and valuable.
“Resilience in the Western Balkans” report is a definite evidence of the importance of further Western Balkans consolidation. Considering the complexity of the current situation, it is rather a difficult task. However, the EU is still the only optimal solution for the sustainable stability and democracy in this region. It is evident that the EU needs to revise and increase its presence in the Western Balkans, not only in order to preserve its own stability, but also to underline its position as a security provider in its proximate neighbourhood. Resilience represents a new EU’s guiding principle in achieving its main goal – stabilisation of its neighborhood and an attempt to overcome the disadvantages of the previous approach. However, the real challenge will again be to put words into action before being geopolitically outplayed.
Nani Klepo1
1 Associate at Ministry of Public Administration of Republic of Croatia, [email protected]
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Siegfried Wiessner (ed.)
General Theory of International Law, Volume 1, American Classics in International Law2017. Brill - Nijhoff. Pages 534 pp. ISBN: 9004338454.
Knowledge is interdependent, it is context-driven and it must serve some purpose. The understanding of any particular body of knowledge is sought through the prism of theories. Theories, in turn, same as the phenomena they seek to enlighten, are defined by their birth, formation, and application. The theory of and about international law is no exception. The task is intellectually formidable and it becomes even more supremely challenging when tackling the very core of theory. In this case, the classics of international law or more aptly the American classics of international law. The task is henceforth multiplied in terms of selecting what constitutes, first, a classic; second, an American classic; and third, an adequately balanced set of authors and scholarship within the domain of American international legal classics.
The book is entitled General Theory International Law. Same as its title, its content and narrative is formed by a sophisticated simplicity, reducing the often complex universe of theory to a level that, while preserving the underlying substance, makes it distinctly comprehensible to any reader.
The General Theory of International Law is the frontrunner or, in the General Editor’s phrasing, ‘the flagship’ of a series of indispensable tomes on the most distinct and novel American legal thought pertaining to the wide and diverse discipline of international law. The book is meant to, one, address the American international law classics and, two, be general, in a sense of comprehensively articulating the most pertinent doctrinal legal knowledge within the broader canon of the American classics.
The editing author, Professor Siegfried Wiessner, a distinguished member of the American legal academy, of European origin, has been uniquely positioned to undertake the first general, yet however, substantively insightful, original and nuanced, study of American classics of international
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legal theory. Being the first engagement of the task of its kind, also measured by its breadth and depth, his work is destined to remain itself a classical view of the American Classics of General International Legal Theory. This proposition can be substantiated on a number of key variables, such as: the accuracy by which the selection of what constitutes an American classic of International Law is made; the rigorous and engrossing critical analysis of the selected material; and the equilibrium applied within and among the identified schools of thought. It is a singularly distinct expansion of the analytical framework currently in place of and about American international legal theory, a most valuable and enduring contribution to the understanding of the making and application of law in the global arena.
The framework of ideas defining the American legal thought of and about international law is presented and critically appraised with a particular sensitivity to context and aim of enhanced comprehension of essential facets of such a voluminous thought. In process, the author has retained its underlying focus on the core of American general theories of and about international law, namely American Legal Realism; the New Haven School of Jurisprudence; International and Transnational Legal Process; liberal theories of international law; linkages of law to humanities and social sciences, including Law and Economics, Critical Legal Studies, LatCrit, TWAIL, and feminist approaches to the discipline.
This ensemble of theories is organised around four major pillars that constitute the larger edifice of American General Theory of International Law. Firstly, American International Legal Realism. Secondly, Liberal Versions of American Legal Thought. Thirdly, International Law and Science (or the claimed ‘empirical turn’ in international legal scholarship). Fourth and finally, Critical Legal Studies, inclusive of an ever-growing set of critical movements. The author delimits the key content of each of the composite pillars, carefully selecting their messengers, accurately transmitting their visions and, put against the very context that has dictated their conceptual theologies, he then appraises and critically compares and contrasts them.
Overall, the General Theory of International Law has portrayed a unique place for the US in the field of international relations and international law,
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hence an active role, in particular in the twentieth century era, in modeling broader conceptual understandings of legal relations in external arenas. It has additionally portrayed a living body of theory, cross-perfecting, and linked to human experience and aspiration for an ever larger universe of core human values that gratify desire. A point of illustration, Dean Pound’s conception of law as process that should serve social ends, for example, has been enlarged and extended by the New Haven School of Jurisprudence into a more precise process of authoritative and controlling decisions aiming at a world public order of human dignity, empirically expressed through a set of eight core human values encompassing the totality of human aspirations. The focus on values, value maximisation and dignity has defined a large body of American legal scholarship. Thomas Franck’s inquiry about what should be done to maximise human well-being, Ronald Dworkin’s concerns for human dignity, or the Law and Economics cost-benefit analysis, which, after all, intends to maximise wealth, are testimonies to their joint philosophy of values; the difference being the latter’s focus on narrower, singular values rather than the more comprehensively defined set of core human aspirations New Haven is providing.
Ultimately, the General Theory of International Law has located the place and space of theories in the totality of American legal thought of and about international law, from creation to operation, in turn producing the first volume of an engrossed and enlightened discussion about the content, context, and critique of specifically American theories of and about international law. The author’s statement that the “American theory about international law is, in many respects, a kaleidoscope of ideas with which it has enriched the world” would analogously apply to this book and its central place in the world of ideas about American international legal theory.
Qerim Qerimi1
1 Visiting Researcher and Professor with the Law and Development Research Group at the Faculty of Law of the University of Antwerp, Visiting Researcher and Professor with the Law and Development Research Group at the Faculty of Law of the University of Antwerp, [email protected]
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Geoffrey Wiseman
Isolate or Engage: Adversarial States, U.S. Foreign Policy, and Public Diplomacy.2015. Stanford. Pages: 328. ISBN: 9780804795524.
Isolate or Engage, edited by Geoffrey Wiseman explores how the United States (US) conducts public diplomacy in adversarial states. An adversarial state is defined as a country “with which the United States maintains limited or no formal diplomatic relations because of mutual hostility…for extended periods” (p. 11). The book covers nine contemporary case studies: Soviet Union/ Russia, China, North Korea, Vietnam, Libya, Iran, Syria, Cuba, and Venezuela. The work, which is primarily composed of case studies, delves into how the US attempts to influence foreign publics when its diplomatic relations are limited, whether limiting diplomatic ties hamper US interests, and challenges and opportunities in public diplomacy when diplomatic relations are limited. The volume as a whole is skeptical of the isolationist foreign policy of the US, which jeopardises the country’s potential for public diplomacy “in a hyperconnected world…driven by popular trends and movements rather than by what governments do” (p. 4).
Most authors in this work employ a nontraditional understanding of diplomacy that includes non-state actors as well as governments as the public diplomacy actors. This book focuses on three kinds of US efforts in public diplomacy in adversarial countries. The first two of which warrant the question of whether they should even be regarded as public diplomacy: traditional government-to-government diplomacy in public using broadcasting, social media, or messengers as intermediaries (President Carter’s visits to North Korea, Chapter 3), which have been termed by Bruce Gregory (2014: 1) “diplomacy’s public dimension” rather than public diplomacy. The second is concerned with pure people-to-people exchanges that may not necessarily have intentional political agendas and hence should be treated at best as unintentional contributions to US public diplomacy efforts. Third, the focus turns to government-sponsored public diplomacy initiatives, which are the least common examples found in the book.
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In the case studies, non-state efforts are emphasised more than state-centric public diplomacy initiatives, particularly due to deep-rooted suspicions of the American government as well as the obvious difficulties of conducting official public diplomacy while diplomatic relations are limited. Indeed, almost every interaction that is not an official government-to-government diplomatic communication is treated as public diplomacy in those chapters that are written by area experts who are not necessarily students of public diplomacy. The reason for this vague conceptual choice seems to be the understanding of traditional diplomacy as private (confidential) diplomacy, while public diplomacy is regarded as being almost everything else (see p. 292). The chapters on China (Chapter 2), Vietnam (Chapter 4) and Cuba (Chapter 8) in particular suggest that public diplomacy should be left to civil society, in line with Manuel Castells’ (2008: 91) idea that public diplomacy “is not government diplomacy,” but it “is the diplomacy of the public.”
Wiseman concludes that US has always been working to influence the publics of isolated countries. However, this has proven very difficult, as isolation restricts the use of the US’s official channels of public diplomacy. Often, individuals and non-state actors are more successful in facilitating exchanges with peoples in isolated countries. Pure people-to-people exchanges in such cases are free from governmental direction and most often lack a political agenda or intention. Therefore, they are not public diplomacy per se, but they may help “form the basis for future normalization of relations and improved ties” (p. 282). Furthermore, diasporas, individuals, and non-state actors are often helpful in catalysing relations and even mediating, but their interactions and messages cannot be fully controlled by the governments (pp. 283, 293). Wiseman recommends increasing the support of the US government for people-to-people exchanges (p. 292), but if these “pure” exchanges based on an understanding of genuine dialogue and mutuality, are also considered to be proxies of US government, publics in adversarial states may become as suspicious of civilian initiatives as they are of official US initiatives.
The work in general takes a skeptical view of isolating foreign policies and makes the case that limited channels of official communication damage the US’s interests vis-à-vis isolated countries, not least by making it impossible to realise the full potential of public diplomacy in them. The
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authors emphasise that it is important to intend to change the behaviour of adversarial states over the long run rather than employing isolating strategies that aim change regimes in adversarial states in the short run. However, another conclusion drawn in the book (particularly chapters on USSR/ Russia, China, North Korea, and Iran) reminds us that what the US can achieve in adversarial states through public diplomacy is limited, particularly when the nature of the problems is a matter of high politics, such as a nuclear standoff.
Isolate or Engage makes three significant contributions to the study of public diplomacy. First, while many studies have failed to address the foreign policy aspect of public diplomacy, this book makes the connection, suggesting that public diplomacy must be integrated into the foreign policy of the US (p. 7). The underlying assumption is that when public diplomacy is detached from foreign policy, it “loses its commonsense meaning and becomes something else” (p. 298). Second, case studies dealing with the US’s public diplomacy with adversarial states ask, as the title of the book suggests, whether to “isolate or engage” with those states. Wiseman’s book reminds us that this fundamental question has been neglected for years in the field of public diplomacy. Third, the case studies contained in this work demonstrate the importance of the connections and activities of individuals and non-state actors, particularly in adversarial states, challenging long-established state-centric international relations theories and bringing people-to-people exchanges closer to the mainstream.
However, the book could certainly have been improved, on at least two fronts. First, most chapters do not go beyond episodic examples of public diplomacy, failing to study each country in a more systematic and analytical way. Second, although Wiseman rightly points out that the boundaries are blurry between public diplomacy and other transnational interactions (pp. 13, 292, 298), the book falls short of addressing “thorny conceptual questions such as who is a public diplomacy actor and what are public diplomacy’s boundaries” (p. 7). The almost interchangeable use of the terms soft power and public diplomacy in the case studies contributes to the work’s overall conceptual unclarity. Nevertheless, Isolate or Engage provides readers with significant insight into whether and how public diplomacy and people-to-people exchanges can contribute to improving ties between adversarial states.
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References
Gregory, B., 2014. The Paradox of Us Public Diplomacy: Its Rise and Demise. Institute for Public Diplomacy and Global Communication. Washington, DC: George Washington University.
Castells, M., 2008. The New Public Sphere: Global Civil Society, Communication Networks, and Global Governance. The ANNALS of the American Academy of Political and Social Science, 616(1): 78-93.
Dr. Kadir Ayhan1
1 Assistant Professor, Hankuk University of Foreign Studies, [email protected]
