For Kosovo, hints of the future in other fledgling states of the 21st century

BELGRADE, Serbia (AP) - On Sunday, Kosovo was born, becoming the 21st century's third new nation. The two other infant states, East Timor and Montenegro, present it with starkly contrasting examples of the challenges that lie ahead.

Montenegro has prospered since it broke with Serbia nearly two years ago, despite the predictions of many observers that the tiny country was not economically viable.

But East Timor's independence was no cure for its accumulated economic and political woes. The country quickly descended into violent turmoil - rebels tried to kill the top two leaders last week - and now requires foreign troops to maintain peace.

Some analysts have already warned that Kosovo's future could more likely mirror the fortunes of faraway East Timor than its Balkan neighbor Montenegro.

Montenegro was an independent kingdom before World War I, then part of Yugoslavia until that state's disintegration in 1991. It remained joined with Serbia until 2006, when its 640,000 people held an independence referendum, and seceded peacefully.

Today, the economy is booming. Annual economic growth is nearly 7 percent and foreign direct investment in 2006 was $950 million, the highest, per capita, in Europe.

Kosovo - with a population of two million, 90 percent of whom are ethnic Albanians - was ruled for several centuries by the Ottoman Turks, then communist Yugoslavia, and finally Serbia.

Despite the inflow of billions of dollars since it came under NATO protection and U.N. administration following the 1999 war that forced the withdrawal of Serb forces, Kosovo remains one of Europe's poorest countries.

Communist-era infrastructure is collapsing and current unemployment exceeds 50 percent.

The obstacles Kosovo now faces are reminiscent of the problems encountered by postcolonial societies in Africa and Asia, said Damien Kingsbury, a professor at the School of International and Political Studies in Victoria, Australia.

"One of the characteristics of those societies - and East Timor is a good example - is that the immensely high expectations of the population at independence cannot be fulfilled because of economic backwardness," he said.

"This causes disenchantment that spills over into troubles, which then lead to an authoritarian response and the curtailing of democracy," Kingsbury said.

Like Kosovo, East Timor is a desperately poor country traumatized by centuries of foreign rule.

These parallels may hold troubling lessons for the fledgling Balkan nation's future.

After East Timor voted for independence in a U.N-sponsored referendum in 1999, the Indonesian army launched a campaign of terror in which 1,400 people died and nearly half its population of nearly one million people fled their homes.

The country was eventually placed under United Nations administration until it proclaimed independence in 2002.

Although East Timor has massive natural gas resources, it still struggles with economic viability and an unemployment rate similar to Kosovo's.

Unfulfilled expectations for improved living standards following independence led to protests and riots that culminated in a military mutiny in 2006 that caused the government's collapse and an Australian-led military intervention.

Last week, rebels badly wounded President Jose Ramos Horta and tried to assassinate Prime Minister Xanana Gusmao.

"Kosovo's history is similarly traumatic, but one would hope the international community has learned its lessons so things may go better there," Kingsbury said.

Kosovo likewise has significant natural resources, including some of the largest lignite coal deposits in Europe. There are also reserves of lead, zinc, uranium, silver, gold and copper.

"In a generation, Kosovo could become a major electricity exporting country, in a power-hungry region," said James Pettifer, a British academic and Balkan specialist.

"But the investments needed are long-termed and even under the most benign conditions would take time to come to fruition."

Kosovo's modern history of bloody conflict with Serbian government forces left several thousand people dead and much of the country's infrastructure destroyed.

Serbia, with Russian support, has vowed to prevent Kosovo from gaining widespread recognition and from joining bodies such as the United Nations.

But Kosovo has an advantage over countries like East Timor, says Robin Shepherd, a senior research fellow at London's Chatham House think tank. The United States and European Union have an "enormous incentive" to make the new nation a success, he said. The EU's biggest powers and the U.S. have already recognized the new state.

The stakes are high due to the very real risk that Kosovo could end up a failed state and a staging area for terrorist groups and crime syndicates in the heart of Europe.

Still, Shepherd said he was optimistic about the nation's prospects.

"Other countries such as Israel also have faced problems with recognition and regional problems but still have prospered," he said.