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Transport corridors in Eurasia: All roads lead to Russia

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At the end of September, the EU and Japan signed an agreement designed to add a new dimension to these two global economic powerhouses’ joint effort in the field of transport, energy and digital technology. This expansion of ties between the Old World and Japan is seen by Western media as a counterweight to, and even a pushback against China’s One Belt, One Road mega-project. What are the prospects of various projects dealing with the ongoing competition between transport corridors in Eurasia?

The EU-Japan rapprochement itself is symptomatic and by no means accidental. The efforts that the United States has been bending the past 2-3 years to unravel the existing international system, which in the course of the past decades has brought political and economic dividends primarily to the world’s most developed countries have intensified with the US also becoming increasingly self-serving, openly ignoring and even harming the interests of its nominal allies. As a result, the leading countries of Europe and Asia increasingly feel the need to strengthen the “global, multilateral order” that can solve problems that no country can solve on its own, from climate change to free trade  themselves, without the US. 

Economic integration in Eurasia is just one such area. According to many leading German media outlets, “an expansion of the Eurasian trade zone bypassing the US-controlled shipping lanes spells a disaster” for America.  To fend off this threat, Washington relies entirely on sub-regional projects, preferably under its own patronage. In the mid-2010s, the United States unveiled its conceptual vision of a future for the Asia-Pacific region, namely – the Trans-Pacific Partnership (TPP), and the New Silk Road initiative for Central Asia. In Europe, the US plans are primarily of a military- strategic nature, assigning for NATO the role of a re-integrator of the European continent in the event of an EU collapse. Simultaneously, the Trump administration persist with its attempts to drive a wedge between the EU’s western and eastern members by backing initiatives proposed by a number of Central-East European countries, and encouraging the development of local transport corridors and trade communities, leaning on the United States, instead of Europe, let alone Eurasia.

Meanwhile, European experts have been discussing the prospect of the EU leading the camp of supporters of maintaining liberal international trade standards as one of the best strategies for Brussels to go for. A similar view has been gaining traction also in Japan, which is increasingly suspicious of Trump’s “crude protectionism” and arm-twisting in trade negotiations. And, adding to all this, are Washington’s new demands for increasing the cost of maintaining American troops. After the United States withdrew from negotiations on the Trans-Pacific Partnership (TPP), Japan was one of the main proponents of keeping the talks going. No longer instrumental in the US efforts to “contain China,” a new-look TPP is able to more flexibly build its relations with the world’s second biggest economy, all the more so since China is viewed by almost all TPP participants as a key trading partner. Moreover, Japan is actively working on the implementation of the 15-sided free trade agreement in Asia and the Pacific, the Regional Comprehensive Economic Partnership (RCEP), to cover half of the global economy, and where the US does not participate, while China does.

As part of this policy, the EU and Japan announced in July that they were setting up a free trade zone between them. And now, they have also signed an infrastructure deal to coordinate transport, energy and digital projects linking Europe and Asia. According to the leaders of Japan and the EU, this is about building up ties between the Indo-Pacific region and the Western Balkans and Africa, as well as setting up a sea route, “leading to the Mediterranean Sea and the Atlantic Ocean.” However, infrastructure projects should not “create huge debts” and depend on “one country.”

But is the new Japanese-European “corridor” capable of becoming efficient without promoting partnership relations with other countries?

There exist various projects of economic integration in Eurasia – both between individual regions and those covering all or most of the regional states. Integration projects, such as the Eurasian Economic Union (EAEU) and the Customs Union promoted by the Russian Federation are actively developing, both politically and economically. China relies on the Silk Road Economic Belt (SREB), which officially embraces most of the countries of Asia and Europe. Japan, for its part, has come up with a comprehensive strategy of Partnership for Quality Infrastructure, proposed by Prime Minister Shinzo Abe.

In terms of the development of transcontinental transport corridors, Russia is in a favorable position. However, its transit potential for the development of trade between Europe and Asia is currently used at less than five percent of its capacity. Meanwhile, a sizeable share of infrastructure facilities in Eurasia (railways and highways) is oriented to Russia and which, according to RBC, can twice shorten the time of cargo traffic between Asia and Europe. In addition, Russia’s geographical position provides unique opportunities for optimizing existing transport corridors and creating new ones, in both meridional and latitudinal directions. And also for creating temporary and permanent corridors through a combination of rail, road and sea transport infrastructure. “The most promising transport corridors are the Northern Sea Route, the Trans-Siberian Railway and the North-South Corridor.”

Most recently, the Russian authorities finally approved plans for building a highway connecting China with Europe and running across Kazakhstan and Belarus. It is planned that hundreds of millions of rubles invested in this project within the next six years will help modernize and expand the transport routes that run through the territory of Russia and a significant part of the former Soviet Union, including the Arctic region. The highway will prove the viability of a project to successfully pair the Eurasian integration formats promoted by Moscow and Beijing with Russia’s national transport infrastructure modernization project. At the end of October, the head of Russian Railways, Oleg Belozerov, confirmed many leading German companies’ interest in participating in the construction of the St. Petersburg – Moscow – Nizhny Novgorod high-speed railway. Road and rail corridors can become the most cost-effective way of cargo shipment across Eurasia, replacing air transport, and in many cases, existing sea routes. According to the German newspaper Heise, Russia could  become the center of the “Eurasian economic space stretching from Portugal to China” and consolidate it, “which can lead to a redistribution of power and to the isolation… of America.”

Another promising long-term strategic project is the 7,200 km North-South International Transport Corridor (INSTC) to combine road and rail routes.

“It will connect the Indian Ocean and the Persian Gulf with the Caspian Sea through Iran, with subsequent access to Northern Europe via Russia.” At the end of 2018, it became known that Russia had released the first tranches of a credit line to finance INSTC. When speaking at the First Caspian Economic Forum in Turkmenistan, held in August, 2019, Prime Minister Dmitry Medvedev called INSTC “a promising area” that reduces by 2.5-fold the time of cargo delivery “from Europe via the Caspian to the Near and Middle East and further on to South Asia and back.” Russia’s long-term partnership with India, (which is the world’s fifth economy), and also with Iran and Azerbaijan, will play an important role here.

On the latitudinal plane, Russia offers potential partners a project for the development of the Northern Sea Route (NSR). In the medium- and long-term period, commercial shipping along the NSR looks more and more attractive, because in some cases northern routes are between 1.5 and 2 times shorter than the main ones. The Chinese are already well aware of this, as they are promoting the concept of connecting the Polar Silk Road, which is designed to provide the People’s Republic with natural resources and alternative shipping routes for export, which, by 2020 will account for 5 to 15 percent of the country’s foreign trade volume, with the Russian NSR. Chinese investors have bought into a number of large industrial and infrastructure projects implemented by Russia beyond the Arctic Circle, including Yamal-LNG. According to Frankfurter Allgemeine Zeitung, “China’s ambitions in the region do not seem to clash with Moscow’s yet.”

Moscow and Beijing are working out the experience of their strategic cooperation primarily when it comes to the economic convergence of the EAEU and the SREB. In June 2018, the two sides completed the Joint Feasible Studies on Completing the Eurasian Economic Partnership Agreement, which envisages liberalization of trade in services and investments, cooperation in the field of electronic commerce, in matters of competition, protection of intellectual property, etc. It is proposed to open the Agreement to all interested states. On October 25, 2019, the Agreement on trade and economic cooperation between the EAEU and the PRC entered into force. Speaking at the plenary session of the 11th investment forum “Russia is Calling!” on November 20 of this year, President Vladimir Putin noted that Moscow and Beijing were working to establish a free trade zone (FTA).

As noted by the Russian Council on Foreign Affairs, this is not just about the integration of transport routes. “The goal is to link production and markets at every stage,” as well as creating an “institutional base” in combination with modernization of infrastructure and development of production “within its framework”. So, the planned construction of a high-speed fiber-optic communication line between Helsinki and Tokyo, which is being handled by the Russian PJSC Megafon and the Finnish Cinia Oy Company, would serve as an example of the digital integration of Europe and Asia.  Megafon’s Strategy and Business Development Director Alexander Sobolev noted that “the Russian Arctic offers the shortest physically possible route between Northern Europe and Asia.”

Russia is ready to expand ties with the European Union in other areas too. Indeed, President Putin came up with a long-term plan to create a Russia-EU free trade zone as early as in 2010. Russia continues to propose moving from competition between projects of “European and Eurasian integration” to their integration. To fully participate in Eurasian integration, the EU first needs to figure out the role it is going to play amid the current erosion of transatlantic relations. And secondly, how it intends to confront the growing threat of internal division. As for Russia, in spring 2019, it reiterated through its Foreign Minister Sergey Lavrov its sustained interest in seeing the EU member-states join the Comprehensive Eurasian Partnership.

As we all know from history, the logic of developing mutually beneficial economic ties can help overcome the most deep-seated political and diplomatic contradictions. In the case of Eurasia, it looks like the processes of expanding trade and other economic relations are able to smooth over many geopolitical differences, and even completely resolve some of the existing political conflicts. At the same time, attempts to ignore Russia, or to minimize its role in continental integration, are extremely counterproductive.

From our partner International Affairs

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Indo-European rapprochement and the competing geopolitics of infrastructure

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Current dynamics suggest that the main focus of geopolitics in the coming years will shift towards the Indo-Pacific region. All eyes are on China and its regional initiatives aimed at establishing global dominance. China’s muscle-flexing behavior in the region has taken the form of direct clashes with India along the Line of Actual Control, where India lost at least 20 soldiers last June; interference in Hong Kong’s affairs; an increased presence in the South China Sea; and economic malevolence towards Australia. With this evolving geopolitical complexity, if the EU seeks to keep and increase its global ‘actorness’, it needs to go beyond the initiatives of France and Germany, and to shape its own agenda. At the same time, India is also paying attention to the fact that in today’s fragmented and multipolar world, the power of any aspiring global actor depends on its diversified relationships. In this context, the EU is a useful partner that India can rely on.

Indo-European rapprochement, which attempts to challenge Chinese global expansion, seeks also to enhance multilateral international institutions and to support a rules-based order. Given the fact that India will hold a seat on the UN Security Council in 2021-22 and the G20 presidency in 2022, both parties see an opportunity to move forward on a shared vision of multilateralism. As a normative power, the EU is trying to join forces with New Delhi to promote the rules-based system. Therefore, in order to prevent an ‘all-roads-lead-to-Beijing’ situation and to challenge growing Chinese hegemony, the EU and India need each other.

With this in mind, the EU and India have finally moved towards taking their co-operation to a higher level. Overcoming difficulties in negotiations, which have been suspended since 2013 because of trade-related thorny topics like India’s agricultural protectionism, shows that there is now a different mood in the air.

The Indian prime minister, Narendra Modi, had been scheduled to travel to Portugal for  a summit with EU leaders, but the visit cancelled because of the Covid-19 pandemic. As a result, the European Commission and Portugal – in its presidency of the European Council – offered India to hold the summit in a virtual format on 8 May 2021. The talks between these two economic giants were productive and resulted in the Connectivity Partnership, uniting efforts and attention on energy, digital and transportation sectors, offering new opportunities for investors from both sides. Moreover, this new initiative seeks to build joint infrastructure projects around the world mainly investing in third countries. Although both sides have clarified that the new global partnership isn’t designed to compete with China’s Belt and Road Initiative (BRI), the joint initiative to build effective projects across Europe, Asia and Africa, will undoubtedly counter Beijing’s agenda.  

The EU and its allies have a common interest in presenting an alternative to the Belt and Road Initiative, which will contain Chinese investment efforts to dominate various regions. Even though the EU is looking to build up its economic ties with China and signed the EU-China Comprehensive Agreement on Investments (CAI) last December, European sanctions imposed on Beijing in response to discrimination against Uighurs and other human rights violations have complicated relations. Moreover, US President Joe Biden has been pushing the EU to take a tougher stance against China and its worldwide initiatives.

This new Indo-European co-operation project, from the point of view of its initiators, will not impose a heavy debt burden on its partners as the Chinese projects do. However, whilst the EU says that both the public and the private sectors will be involved, it’s not clear where the funds will come from for these projects. The US and the EU have consistently been against the Chinese model of providing infrastructure support for developing nations, by which Beijing offers assistance via expensive projects that the host country ends up not being able to afford. India, Australia, the EU, the US and Japan have already started their own initiatives to counterbalance China’s. This includes ‘The Three Seas Initiative’ in the Central and Eastern European region, aimed at reducing its dependence on Chinese investments and Russian gas. Other successful examples are Japan’s ‘Expanded Partnership for Quality Infrastructure’ and its ‘Free and Open Indo-Pacific Strategy’. One of the joint examples of Indo-Japanese co-operation is the development of infrastructure projects in Sri Lanka, Myanmar and Bangladesh. The partners had been scheduled to build Colombo’s East Container Terminal but the Sri Lankans suddenly pulled out just before signing last year. Another competing regional strategy is the Asia-Africa Growth Corridor (AAGC), initiated by India, Japan and a few African countries in 2017. This Indo-Japanese collaboration aims to develop infrastructure in Africa, enhanced by digital connectivity, which would make the Indo-Pacific Region free and open. The AAGC gives priority to development projects in health and pharmaceuticals, agriculture, and disaster management. 

Undoubtably, this evolving infrastructure-building competition may solve the problems of many underdeveloped or developing countries if their leaderships act wisely. The newly adopted Indo-European Connectivity Partnership promises new prospects for Eastern Europe and especially for the fragile democracies of Armenia and Georgia.

The statement of the Indian ambassador to Tehran in March of this year, to connect Eastern and Northern Europe via Armenia and Georgia, paves the way for necessary dialogue on this matter. Being sandwiched between Russia and Turkey and at the same time being ideally located between Europe and India, Armenia and Georgia are well-placed to take advantage of the possible opportunities of the Indo-European Partnership. The involvement of Tbilisi and Yerevan in this project can enhance the economic attractiveness of these countries, which will increase their economic security and will make this region less vulnerable vis-à-vis Russo-Turkish interventions. 

The EU and India need to decide if they want to be decision-makers or decision-takers. Strong co-operation would help both become global agenda shapers. In case these two actors fail to find a common roadmap for promoting rules-based architecture and to become competitive infrastructure providers, it would be to the benefit of the US and China, which would impose their priorities on others, including the EU and India.

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The Leaders of the Western World Meet

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The annual meeting of the G7 comprising the largest western economies plus Japan is being hosted this year by the United Kingdom.  Boris Johnson, the UK Prime Minister has also invited Australia, South Korea, South Africa and India.  There has been talk of including Russia again but Britain threatened a veto.  Russia, which had been a member from 1997, was suspended in 2014 following the Crimea annexation.  

Cornwall in the extreme southwest of England has a rugged beauty enjoyed by tourists, and is a contrast to the green undulating softness of its neighbor Devon.  St. Ives is on Cornwall’s sheltered northern coast and it is the venue for the G7 meeting (August 11-13) this year.  It offers beautiful beaches and ice-cold seas.

France, Germany. Italy, UK, US, Japan and Canada.  What do the rich talk about?  Items on the agenda this year including pandemics (fear thereof) and in particular zoonotic diseases where infection spreads from non-human animals to humans.  Johnson has proposed a network of research labs to deal with the problem.  As a worldwide network it will include the design of a global early-warning system and will also establish protocols to deal with future health emergencies.

The important topic of climate change is of particular interest to Boris Johnson because Britain is hosting COP26  in Glasgow later this year in November.  Coal, one of the worst pollutants, has to be phased out and poorer countries will need help to step up and tackle not just the use of cheap coal but climate change and pollution in general.  The G7 countries’ GDP taken together comprises about half of total world output, and climate change has the potential of becoming an existential problem for all on earth.  And help from them to poorer countries is essential for these to be able to increase climate action efforts.

The G7 members are also concerned about large multinationals taking advantage of differing tax laws in the member countries.  Thus the proposal for a uniform 15 percent minimum tax.  There is some dispute as to whether the rate is too low.

America is back according to Joe Biden signalling a shift away from Donald Trump’s unilateralism.  But America is also not the sole driver of the world economy:  China is a real competitor and the European Union in toto is larger.  In a multilateral world, Trump charging ahead on his own made the US risible.  He also got nowhere as the world’s powers one by one distanced themselves.

Secretary of the Treasury Janet Yellen is also endorsing close coordination in economic policies plus continued support as the world struggles to recover after the corona epidemic.  India for example, has over 27 million confirmed cases, the largest number in Asia.  A dying first wave shattered hopes when a second much larger one hit — its devastation worsened by a shortage of hospital beds, oxygen cylinders and other medicines in the severely hit regions.  On April 30, 2021, India became the first country to report over 400,000 new cases in a single 24 hour period.

It is an interdependent world where atavistic self-interest is no longer a solution to its problems.

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Revisiting the Bosnian War

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Genocide is not an alien concept to the world nowadays. However, while the reality (and the culprit) is not hard to profile today, history is ridden with massacres that were draped and concealed from the world beyond. Genocides that rivaled the great warfares and were so gruesome that the ring of brutality still pulsates in the historical narrative of humanity. We journey back to one such genocide that was named the most brutish mass slaughter after World War II. We revisit the Bosnian War (1992-95) which resulted in the deaths of an estimated 100,000 innocent Bosnian citizens and displaced millions. The savage nature of the war was such that the war crimes committed constituted a whole new definition to how we describe genocide.

The historical backdrop helps us gauge the complex relations and motivations which resulted in such chaotic warfare to follow suit. Post World War II, the then People’s Republic of Bosnia and Herzegovina joined the then Federal People’s Republic of Yugoslavia. Bosnia-Herzegovina became one of the constituent republics of Yugoslavia in 1946 along with other Balkan states including Croatia, Slovenia, Macedonia, Montenegro, and Serbia. As communism pervaded all over Yugoslavia, Bosnia-Herzegovina began losing its religion-cultural identity. Since Bosnia-Herzegovina mainly comprised of a Muslim population, later known as the Bosniaks, the spread of socialism resulted in the abolition of many Muslim institutions and traditions. And while the transition to the reformed Federal Republic of Yugoslavia in 1963 did ease the ethnic pressure, the underlying radical ideology and sentiments never fully subsided.

The Bosniaks started to emerge as the majority demographic of Bosnia and by 1971, the Bosniaks constituted as the single largest component of the entire Bosnia-Herzegovina population. However, the trend of emigration picked up later in the decades; the Serbs and the Croats adding up to their tally throughout most of the 70s and mid-80s. The Bosnian population was characterized as a tripartite society, that is, comprised of three core ethnicities: Bosniaks, Serbs, and Croats. Till  1991, the ethnic majority of the Bosniaks was heavily diluted down to just 44% while the Serbian emigrants concentrated the Serbian influence; making up 31% of the total Bosnian population.

While on one side of the coin, Bosnia-Herzegovina was being flooded with Serbs inching a way to gain dominance, the Yugoslavian economy was consistently perishing on the other side. While the signs of instability were apparent in the early 80s, the decade was not enough for the economy to revive. In the late 80s, therefore, political dissatisfaction started to take over and multiple nationalist parties began setting camps. The sentiments diffused throughout the expanse of Yugoslavia and nationalists sensed an imminent partition. Bosnia-Herzegovina, like Croatia, followed through with an election in 1990 which resulted in an expected tripartite poll roughly similar to the demographic of Bosnia. The representatives resorted to form a coalition government comprising of Bosniak-Serb-Craot regime sharing turns at the premiership. While the ethnic majority Bosniaks enjoyed the first go at the office, the tensions soon erupted around Bosnia-Herzegovina as Serbs turned increasingly hostile.

The lava erupted in 1991 as the coalition government of Bosnia withered and the Serbian Democratic Party established its separate assembly in Bosnia known as ‘Serbian National Assembly’.  The move was in line with a growing sentiment of independence that was paving the dismantling of Yugoslavia. The Serbian Democratic Party long envisioned a dominant Serbian state in the Balkans and was not ready to participate in a rotational government when fighting was erupting in the neighboring states. When Croatia started witnessing violence and the rise of rebels in 1992, the separatist vision of the Serbs was further nourished as the Serbian Democratic Party, under the leadership of Serb Leader Radovan Karadžić, established an autonomous government in the Serb Majority areas of Bosnia-Herzegovina.

The vision and the actions remained docile until the ring of independence was echoed throughout the region. When the European Commission (EC), now known as the European Union (EU), and the United States recognized the independence of both Croatia and Slovenia, Bosnia-Herzegovina found itself in a precarious position. While a safe bet would have been to undergo talks and diplomatic routes to engage the Serbian Democratic Party, the Bosnian President Alija Izetbegović failed to realize the early warnings of an uprising. Instead of forging negotiations with the Bosnian Serbs, the Bosniak President resorted to mirror Croatia by organizing a referendum of independence bolstered by both the EC and the US. Even as the referendum was blocked in the Serb autonomous regions of Bosnia, Izetbegović chose to pass through and announced the results. As soon as the Bosnian Independence from Yugoslavia was announced and recognized, fighting erupted throughout Bosnia and Herzegovina.

The Bosnian Serbs feared that their long-envisioned plan of establishing the ‘Great Serbia’ in the Balkans was interred which resulted in chaos overtaking most of Bosnia. The blame of the decision, however, was placed largely on the Bosniak president and, by extension, the entire ethnic majority of the Bosniaks. The Bosnian Serbs started to launch attacks in the east of Bosnia; majorly targeting the Bosniak-dominated towns like Foča, Višegrad, and Zvornik. Soon the Bosnian Serb forces were joined by the local paramilitary rebels as well as the Yugoslavian army as the attacks ravaged the towns with large Bosniak populations; swathing the land in the process. The towns were pillaged and pressed into control whilst the local Bosniaks and their Croat counterparts were either displaced, incarcerated, or massacred.

While the frail Bosnian government managed to join hands with the Croatian forces across the border, the resulting offense was not nearly enough as the combination of Serb forces, rebel groups, and the Yugoslavian army took control of almost two-thirds of the Bosnian territory. The Karadžić regime refused to hand over the captured land in the rounds of negotiations. And while the war stagnated, the Bosniak locals left behind in small pockets of war-ravaged areas faced the brunt in the name of revenge and ethnic cleansing.

As Bosniaks and Croats formed a joint federation as the last resort, the Serbian Democratic Party established the Republic Srpska in the captured East, and the military units were given under the command of the Bosnian-Serb General, Ratko Mladic. The notorious general, known as the ‘Butcher of Bosnia’, committed horrifying war crimes including slaughtering the Bosniak locals captured in violence, raping the Bosniak women, and violating the minors in the name of ethnic cleansing exercises. While the United Nations refused to intervene in the war, the plea of the helpless Bosniaks forced the UN to at least deliver humanitarian aid to the oppressed. The most gruesome of all incidents were marked in July 1995, when an UN-declared safe zone, known as Srebrenica, was penetrated by the forces led by Mladic whilst some innocent Bosniaks took refuge. The forces brutally slaughtered the men while raped the women and children. An estimated 7000-8000 Bosniak men were slaughtered in the most grotesque campaign of ethnic cleansing intended to wipe off any trace of Bosniaks from the Serb-controlled territory.

In the aftermath of the barbaric war crimes, NATO undertook airstrikes to target the Bosnian-Serb targets while the Bosniak-Croat offense was launched from the ground. In late 1995, the Bosnian-Serb forces conceded defeat and accepted US-brokered talks. The accords, also known as the ‘Dayton Accords’, resulted in a conclusion to the Bosnian War as international forces were established in the region to enforce compliance. The newly negotiated federalized Bosnia and Herzegovina constituted 51% of the Croat-Bosniak Federation and 49% of the Serb Republic.

The accord, however, was not the end of the unfortunate tale as the trials and international action were soon followed to investigate the crimes against humanity committed during the three-year warfare. While many Serb leaders either died in imprisonment or committed suicide, the malefactor of the Srebrenica Massacre, Ratko Mladic, went into hiding in 2001. However, Mladic was arrested after a decade in 2011 by the Serbian authorities and was tried in the UN-established International Criminal Tribunal for Yugoslavia (ICTY). The investigation revisited the malicious actions of the former general and in 2017, the ICTY found Ratko Mladic guilty of genocide and war crimes and sentenced him to life in prison. While Mladic appealed for acquittal on the inane grounds of innocence since not he but his subordinates committed the crimes, the UN court recently upheld the decision in finality; closing doors on any further appeals. After 26-years, the world saw despair in the eyes of the 78-year-old Mladic as he joined the fate of his bedfellows while the progeny of the victims gained some closure as the last Bosnian trail was cased on a note of justice.

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