Bill Klinton Avenue in the centre of Pristina remains littered with advertisements of smiling candidates from the parliamentary elections of 17 November 2007. Beyond the grey Tetris-shaped communist-era buildings stand modern government ministries which fly, side by side, two flags: the blue-and-white of the United Nations and the black-and-red with its double-headed eagle motif which Kosovo has adopted (from Albania) as its own de facto flag. In the ministry of public works, a large picture of Ibrahim Rugova, Kosovo's deceased independence leader, adorns the façade.

Juan Garrigues is a researcher in the peace, security and human rights division of the Fundación para las Relaciones Internacionales y el Diálogo Exterior (Fride) in Madrid
A visitor might be excused a moment's confusion. It is hard to believe that this is still part of Serbia. Perhaps the only thing that is clear in Kosovo is that there is a huge divide between the de jure status of this piece of land and the de facto reality on the ground.

The United Nations Security Council's Resolution 1244, passed at the end of the war over the contested territory in March-June 1999, leaves no doubt that Kosovo remains constitutionally bound to Serbia. But a stroll through Pristina quickly exposes this as, in reality, a myth. The symbols of the nascent Kosovar state are omnipresent; any signs of Serbian sovereignty are long gone. Under the post-1999 tutelage of the United Nations Interim Administration Mission in Kosovo (Unmik), the international community has assisted Kosovo - which in effect means the Kosovar Albanians, who form 90% of the population - in creating what are known as the Provisional Institutions of Self Government (PISG). These institutions remain weak, but they are functioning with increasing independence from international oversight.

Now, it is crunch-time for Kosovo's "final status". A tortuous negotiating process involving key international actors as well as Serbian and Kosovar representatives culminates on 10 December 2007 with a declaration about Kosovo's constitutional future. As the deadline approaches, the divisions over which is the best of the bad solutions to the Kosovo dilemma persist.

The discussions between the Serb and Kosovar delegations were from the start effectively reduced to a zero-sum game: Serbia (backed by Russia) will not accept any solution that violates its territorial integrity, while Kosovars (supported by Washington) will only be satisfied with independence. Here too, the struggle between the de jure status of this piece of land and the de facto reality on the ground is visible.

The deadlock is likely to be broken by a declaration of independence by the Kosovo authorities at some point after the 10 December deadline. If and when that happens, what kind of country will be launching into a new era?

State-building gone sour

"When I was in school and university in the 1990s, parallel institutions were a symbol of solidarity and independence", remembers Valon Murati, the young director of the Center for Human Rights at the University of Pristina. In 1990, Serbia - under the rule of Slobodan Milosevic - restricted Kosovo's autonomous status in federal Yugoslavia. The resulting changes included a new school curriculum that was opposed by the Kosovar Albanian majority; the prosperous among the population offered their houses as improvised schools. A parallel education system was created.

In education as in other areas of society, many of the individuals and groups that led Kosovo's resistance to Serbian authority have acquired official status. The same professors that were teaching students in private residences during the 1990s are now professors at Pristina University. In the military arena, a large component of the guerrilla Kosovo Liberation Army (KLA) was folded into the Kosovo Protection Corps (KPC). In politics, the Democratic Party of Kosovo (PDK) led by Hashim Thaci - formerly political chief of the KLA - emerged as the winner of the 17 November elections.

But the transition has been far from smooth. Kosovo is a clan-based society where political parties are based on family allegiances and a handshake means more than a signature on a piece of paper. This has reinforced the rampant corruption and administrative failings of the "state-building" process.

Among openDemocracy's articles on Kosovo and the future of Serbia:

Peter Lippman, "Kosovo: approaching independence or chaos?" (30 October 2006)

TK Vogel, "Kosovo: a break in the ice" (2 February 2007)

Marko Attila Hoare, "Kosovo: the Balkans' last independent state" (12 February 2007)

Vicken Cheterian, "Serbia after Kosovo" (18 April 2007)

Neven Andjelic, "Serbia and Eurovision: whose victory?" (25 May 2007)

Eric Gordy, "Serbia's Kosovo claim: much ado about..." (2 October 2007)
Flaka Surroi, director of Kosovo's leading newspaper Koha Ditore, is critical of the way that the UN-backed privatisation of communist-era enterprises has become the vehicle of costly, government-sponsored scam in which local and international partners are deeply involved. In one municipality, she says, the land was divided into parcels of ten square metres that were sold for €1 each.

The UN estimates the unemployment rate in Kosovo as close to 50% (a possible underestimate), in a young country where more than half the population is under the age of 25. Pristina's electricity supply is erratic; there are constant blackouts.

If the post-1999 period was for Kosovar Albanians one of euphoria and gratitude to the international leaders who had led the campaign to oust the Serbian military, today there is growing disillusionment with the international community and with local politicians alike. On the eve of their independence, Kosovar citizens have yet to gain the economic prosperity or the security of livelihood they have also aspired to for so long.

They also resent the fact the most powerful man in Kosovo in institutional terms is a figure from Germany (Joachim Rűcker) nominated by another figure in New York. Rűcker, the UN envoy, retains the power to overturn many decisions made by the national assembly as well as final authority over the Kosovo budget. Luzlim Peci, a political analyst, says that the priority of successive UN envoys in Kosovo has been to "finish their mandates without encountering significant problems".

Kosovo's most outspoken and radical group, the youth-led Vetevendosje (Self-determination), seeks to mobilise this disillusion. One of its members quotes Antonio Cassese's affirmation of the "self-determination of peoples" to call for an immediate referendum on independence, demand Unmik's exit, and threaten that "peaceful means in Kosova [the Albanian spelling] are being exhausted day by day".

The real options

An important dimension of the current reality in Kosovo is that the Serbs who live in the territory have their parallel institutions. After the 1999 war, many thousands of Serbs fled north, either to Serbia proper or to the Serb-majority northern part of Kosovo (around the city of Mitrovica). Today, Serbs (6% of Kosovo's overall population) control the territory north of the Ibar river and form a clear majority there (as well as in an a number of enclaves to the south). Since 1999, Belgrade has enforced a ban on the incipient Kosovar institutions by encouraging Serbs not to vote in elections and paying double salaries to teachers, doctors and civil servants in these areas.

The divided city of Mitrovica symbolises the tensions between the Albanian majority and the Serb minority. A member of the Serbian National Council and of the Mitrovica "bridgewatchers" - who police movement across the Ibar says that after the March 2004 riots in which many Serbian (and Roma) communities and sites were targeted and destroyed, most of his neighbours have been afraid to cross into the Albanian south. He assures me that even if independence is declared, the Serbs living in northern Kosovo will remain part of Serbia.

The attitudes of the populations, pre- and post-1999, towards official institutions dominated by the "other" community are a mirror image of each other. A UN official in Mitrovica says: "We came to protect Albanians from Serbia and we have ended up protecting Serbs. As has happened so many times before, the victim has become the aggressor."

There are, then, many blemishes on the UN's ambitious state-building project in Kosovo. Although institutions are functioning, many observers believe that long-term objectives such as respect for the rule of law and economic development have been sacrificed in favour of the short-term aims of maintaining international support and trying to appease the Albanian majority's demands.

Today, a negotiated independence with international consensus is impossible, while all the other "realistic" outcomes carry dangerous trade-offs. It seems clear in any case that Kosovars will declare independence sooner rather than later - perhaps as early as 10 December 2007 itself. They have struggled for independence for many years, they are increasingly sceptical of the United Nations, they have the support of the United States, and they now have functioning institutions.

But such a declaration raises many questions, among them what Serbia's reaction will be and what effect this reaction could have elsewhere in the region, principally Bosnia & Herzegovina where leaders of the Republica Srpska may see a precedent for their own aspirations.

Belgrade's support for the northern, Serb-majority Kosovo municipalities is likely to continue, consolidating what could become a de facto partition. Many Serbs in the enclaves in the south may choose to move north. A Belgrade-led embargo that could affect power-supplies and food-imports would have severe repercussions. The overall result would be a situation of permanent tension where neither side is fully satisfied and where divisions in the international community divisions are further exposed.

Most European Union member-states are convinced that the least-worst solution is an independent Kosovo supervised by the EU along the lines of the original plan devised by former Finnish president, Martti Ahtisaari and presented to the United Nations in March 2007. They argue that the concerns of some member-states - over the fallout in the western Balkans, their own internal regional disputes, and other frozen conflicts in the former Soviet Union - must be overcome. But if they succeed, the EU cannot rely on the United States to lead the post-independence effort: Europe must remain united and find its own formula to ensure that Kosovo does not become a failed state.