A major effort is needed to persuade the Serbian minority that it has a future in Kosovo if the new state is to solidify its controversial independence.

This report argues that such integration is an important challenge for the year-old state. The Pristina government should do more to emphasise to Kosovo Serbs – few of whom deal with state bodies – the benefits of dialogue and cooperation. There is a real opportunity now that Belgrade’s strategy to undermine independent Kosovo by supporting parallel institutions both to prevent Serbs’ exodus and to isolate them from Kosovo structures is having only limited success.

“Belgrade’s approach has become more difficult to sustain because its budget is under strain from the global economic crisis, and the parallel institutions it has set up for Serbs in Kosovo are rife with corruption”, says Srdjan Djeric, Crisis Group’s Balkans Analyst. “Belgrade has been paying salary supplements for public-sector workers, as an inducement for them remain in Kosovo, but it has been forced to cut back, thus reducing its leverage and control. This is an opportunity for the Pristina government”

The policy of opposing all engagement retains support among Serbs north of the Ibar River but has proved unrealistic for those living in the south’s smaller enclaves, who have found there is no choice but to deal with Albanian society around them. Despite Belgrade’s boycott call, increasing numbers of Serbs are beginning to engage pragmatically with Kosovo institutions, relying on them for services, applying for official documents and accepting Kosovo salaries.

Kosovo’s best opportunity to further the integration of its Serb minority is to implement a comprehensive decentralisation plan like that recommended before independence by the UN Secretary-General’s special envoy, Martti Ahtisaari. It would create new Serb-majority municipalities with enhanced autonomy in education, healthcare and culture that could maintain close ties with Serbia. But for this approach to have a chance of gaining Serb acceptance, Pristina needs to avoid burdening it with rhetoric on Kosovo’s independence.

The U.S., EU and others should support this approach by encouraging dialogue between Belgrade and Pristina on matters affecting Kosovo Serbs. The EU in particular must use the leverage it has due to Serbia’s desire to advance its membership prospects to insist Belgrade end support for the parallel structures and not hinder the integration of Kosovo Serbs.

“There is no easy way to address Serb objections to dealing with Kosovo institutions”, warns Sabine Freizer, Crisis Group’s Europe Program Director. “Everything should be done to encourage integration especially locally, where Serbs’ real daily problems can be addressed more effectively if a transparent, accountable decentralisation system is put in place”.

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Long Live my Homeland