Bosnia: The Future on Hold? (ARI)

Bosnia: The Future on Hold? (ARI)

Theme: Bosnia has made great progress since the end of the Bosnian war but major challenges remain.

Summary: This year was supposed to be the year of ‘all change’ in Bosnia. The Office of the High Representative (OHR) was set to be abolished and full power invested in the hands of Bosnian leaders. Now, a decision has been taken to keep OHR open. One reason for this has been a slowing down of the pace of change in Bosnia and another is the fear of any political spillover from any decision about the future status of Kosovo. Bosnia is particularly vulnerable to regional politics but if Serbia can be set back on the path towards European integration this will bode well for it. However, a concerted attempt needs to be made to keep Bosnia on the path of reform or political decomposition could set in.

Analysis: A year ago there was much optimism about the future of Bosnia. Today a lot of that has evaporated but how one views the country’s present and future depends to a great extent on whether one is an optimist or a pessimist. The former argue that huge strides have been made since the end of the war in 1995 and that slowly but surely Bosnia’s central institutions are being strengthened. Pessimists argue that the country, in its present form, is unviable, depends on a foreign controlling hand in its political life and still remains vulnerable to disintegration.

This year a number of key decisions on the future have already been taken and more remain to be made. However, it would be quite wrong to look at Bosnia in isolation from the rest of the region and the country is vulnerable, in a unique way, to developments elsewhere. Specifically, and in the short term, it remains to be seen whether, or how, decisions on the future of Kosovo will impact on Bosnia.

This year was supposed to be the year of ‘all change’. It was supposed to be the one in which Bosnia took full control of its own destiny. Indeed, western diplomats, taking into consideration the regional context, had everything worked out. They believed that Kosovo, Serbia’s southern province, which is under UN jurisdiction, would be independent by the end of 2006 and that, that problem having been resolved, they could abolish the Office of the High Representative (OHR) in Bosnia. This is a position which is tantamount to that of a sort of powerful international governor general. However these plans have gone awry and now the future looks less certain than it did some months ago.

The job of High Representative was created at the time of the Dayton Accords, which ended the Bosnian war in 1995. However, given the political paralysis in the country in the early post-war years, in 1997 it was invested with what were called the Bonn Powers. These gave the High Representative huge power to intervene in politics, to sack elected politicians almost as he saw fit and to impose laws if necessary. Among holders of the post have been Carlos Westendorp, the former Spanish Foreign Minister, and from 2002 until 2006 Britain’s Lord Ashdown. Both made liberal use of the Bonn Powers especially where the elected representatives of Bosnia’s three peoples –Serbs, Croats and Bosniaks (formerly known as Muslims)– were unable to agree.

In great measure the Bonn Powers and the personalities of the High Representatives were an important factor in breaking the deadlock over several crucial issues in Bosnia. Indeed in the last few years several decisions have been made which would have been considered unimaginable right after the war. Today, for example, separate armies have been abolished in Bosnia, freedom of movement has been completely restored, Bosnia’s borders are controlled by a single state-level police service, there is now one state agency to collect VAT and so on.

While all these factors have been widely hailed as positive developments, several severe impediments to the smooth functioning and development of Bosnia have been plain for all to see. The Dayton Accords were a great success in ending the war; now, however, the structures that they bequeathed the state are widely seen as needing reform and modernisation. Today, Bosnia has a weak central government, two ‘entities’ and, in Brcko, one self-governing district. The Serbian entity is called the Republika Srpska (RS) while the Bosniak-Croat one, which in turn is subdivided into ten powerful cantons, is called the Federation of Bosnia & Hercegovina. The state, the RS, the Federation, the cantons and Brcko all replicate many levels of government and administration and have their own police forces, making for a highly inefficient form of governance for the country’s mere 3.8 million people. 

How to tackle these structural problems and move Bosnia along the road to European integration have been amongst the main concerns preoccupying diplomats and international officials over the last few years and, until last year at least, Bosnia did appear to be making rapid progress. For example, before opening talks with Bosnia in November 2005 on a Stabilisation and Association Agreement (SAA), which is widely seen as the first step towards EU membership, the EU insisted that Bosnia comply with 16 demands. These ranged from energy sector restructuring to improvements in the customs and tax system and streamlining the bureaucracy. In great measure these were complied with and a Bosnian team made rapid progress in negotiating the deal that was ready one year later. Since then, however, it has remained unsigned because Bosnia’s politicians have been unable to agree on a number of reforms which the EU is now demanding before signing, the most important of which is to rationalise the country’s police services.

In 2005, as things appeared to be going well, in large measure thanks to the strong arm tactics of Lord Ashdown, ideas began to coalesce about winding down the international presence in Bosnia. Thus several key decisions were made. The first was that Lord Ashdown was to be succeeded by Christian Schwarz-Schilling, a former German Minister and businessman with considerable Bosnian experience. He came to the job in January 2006 with a very clear agenda. He said he would step back and only use the Bonn Powers if the country’s peace was threatened, or in relation to indictments issued by the UN’s war crimes tribunal in The Hague. It was time, he argued, for Bosnians to take full control of their country. Thus, for the first part of his tenure at least, he did very little. Initially this philosophy found widespread acceptance amongst the international officials who deal with Bosnia and indeed they decided to take it to its logical conclusion. It was thus decided that the post of High Representative would be abolished on 30 June of this year. The theory was that as the post is ‘double-hatted’ with that of the European Union Special Representative in Bosnia (EUSR) Mr Schwarz-Schilling and his successors could continue to exercise power, or now influence, through that post, which would be tied to EU conditionality.

The decision to abolish OHR was taken by the Steering Board of the Peace Implementation Council (PIC), which comprises 55 countries and organisations to which OHR answers under the terms of the Dayton Accords. After it had made its decision in June 2006, parallel moves began to drastically cut the number of foreign troops remaining in Bosnia. In the wake of the Dayton Accords some 60,000 NATO-led peacekeepers fanned out across the country. Over the years this number was run down and in December 2004 NATO handed its mission over to the EU, in what was its largest ever mission under the aegis of its European Security and Defence Policy (ESDP). Initially some 6,300 troops were deployed. In January of this year their number totalled 5,769 soldiers, all of whom came from EU countries except for 664 from other countries including Turkey. The largest contributor was Germany with 924 soldiers, followed by Italy with 902, the UK with 593, France with 478 and Spain with 425. In December the EU’s Peace and Security Committee decided to cut the number of troops in Bosnia to 2,500 by the end of this year.

Despite this optimism about the future, the first sign that things were not going to plan came as early as 26 April last year. At that point a US-backed initiative aimed at making some relatively modest constitutional reforms failed because it did not get the two-thirds of votes necessary in parliament to push it through. Significantly Mr Schwarz-Schilling, true to his philosophy, did little to cajole Bosnian politicians into securing its success. Bosnia’s Serbs are often blamed for blocking anything that aims to give more power to institutions in Sarajevo, but in this case the main opposition came from the Bosniak party of wartime premier Haris Silajdzic, who argued that while they approved of most of the proposed reforms, they did not tackle what they considered the main impediment to Bosnia’s future which is the power of the entities over the state.

The second indication that things were going wrong came in the wake of Montenegro’s referendum in May last year when its citizens voted in favour of independence. At that point Milorad Dodik, the premier of the RS, stated that if Montenegrins had a right to a referendum on independence then he could not see why the citizens of the RS could not have the same. This was nonsense in that everyone understood that, legally speaking, the Montenegrins had a right to secede from their federation with Serbia, because they were a fully-fledged republic of the former Yugoslavia, just like Croatia, Slovenia and Bosnia itself had been, and were thus constitutionally invested with that right. By contrast, alarm bells really began to ring because he then pointed out, certainly with the full encouragement of Vojislav Kostunica, Serbia’s nationalist and conservative premier, that if Kosovo –technically only a province of Serbia– could soon be recognised as an independent state then why should Serbs in Bosnia be denied the same possibility?

Elections were held across Bosnia on 1 October and Mr Dodik swept the board in the RS. His rhetoric about possible secession, however, provided a huge fillip to the campaign of Mr Silajdzic, who in turn argues that the RS is a creation based on genocide and should thus be abolished. In this way his campaign provided a huge boost to Mr Dodik. Mr Silajdzic was elected as the Bosniak representative on the country’s tripartite presidency while Mr Dodik remained premier of the RS and his party’s success gave him the right to nominate the new Prime Minister for Bosnia’s central government, Nikola Spiric. After several months of negotiations, a seven-party coalition government was sworn in on 9 February. Largely thanks to disputes between Bosnian Croat parties the Federation continued to remain without a new government until one was approved by parliament on 22 March, despite objections from Mr Schwarz-Schilling who declared the next day that regretfully he felt obliged now to use the Bonn Powers to nullify this decision. 

In the light of the increasing difficulties within Bosnia and the fact that Kosovo was not resolved by the end of last year, and indeed still remains to be resolved, Mr Schwarz-Schilling and the diplomats who deal with Bosnia began to take stock of their positions. The High Representative himself appeared to lose faith in his philosophy of handing over full power to the Bosnians, at least in the short run, and thus began to campaign for the Bonn Powers to be retained. He was also challenged by Mr Dodik after he appeared to threaten action against him in the case that he called a referendum. Mr Dodik responded by saying he would bring 200,000 people onto the streets of Banja Luka, the RS capital and ignore any edict issued with the Bonn Powers. Mr Schwarz-Schilling also began to be ridiculed in the Bosnian press, which accused him of falling asleep in meetings. A particularly galling incident, and one which elicited much irritation in Brussels, was a cartoon on the cover of Dani, a Sarajevo magazine. This showed Mr Schwarz-Schilling sitting on the pavement using an umbrella to shield himself while Mr Dodik urinated in his eye. The tattered umbrella depicted the European flag.

At the time the PIC took the decision to abolish OHR a safety clause was inserted by which it was decided to confirm the decision in February of this year. By the time the meeting took place it was already known what would happen. It was decided that OHR be kept open for another year, until 30 June 2008, but that Mr Schwarz-Schilling would not remain beyond 30 June of this year. In effect, he was sacked and is now a lame duck. In the meantime he is increasingly being eclipsed by his new deputy, Raffi Gregorian, an American, who is also the senior international official presiding over Brcko. As regards a successor to Mr Schwarz-Schilling, a strong candidate is Miroslav Lajcak, a senior Slovak diplomat much lauded for his work for the EU in overseeing Montenegro’s referendum on independence.

Quite apart from the disappointment felt by international officials over the slowing down of the pace of change in Bosnia the single most important reason for deciding to keep OHR open was the fear that, if and when Kosovo becomes independent, RS leaders, egged on by Serbia, might decide to challenge the international community over the issue. Opinion polls have consistently shown that Bosnian Serbs would prefer union with Serbia although there is a widespread feeling that leaders such Mr Dodik would either prefer to keep as much power as possible for their entity within Bosnia or if that was not possible, run an independent state of their own.

Significantly, at the same time as the PIC decided to keep open the OHR the EU decided to confirm its own December decision to cut the number of EUFOR troops remaining in the country. Their rationale was that whatever happened in Bosnia a return to violence was exceedingly unlikely.

As if these two February decisions were not enough, a third one was also made. In 1993 the Bosnian Government, then under siege from Serb forces in Sarajevo, launched a case at the International Court of Justice (ICJ) accusing the then Yugoslavia of genocide. For various reasons concerning disputes over jurisdiction the case only came to a conclusion this year. On 26 February the ICJ made public its judgement. It said that genocide had taken place during the 1995 massacre of some 8,000 Bosniak men and boys at Srebrenica but that there was no proof that Serbia, as a state (and in this case the successor state to Yugoslavia), could be proved responsible for this as opposed to the RS army and police, despite the military and financial help given to them by Belgrade during the war. It also concluded that Serbia was guilty of failing to prevent genocide in Srebrenica but that Bosnia could not demand reparations from Serbia.

The ICJ judgement appeared even-handed but the Bosnian case may have suffered from the fact that the transcripts from Serbia’s Supreme Defence Council given to the UN’s Yugoslav war crimes tribunal (which is for individuals and not states), were not made available to it. Within Bosnia the ruling led to an immediate increase in political tensions. Mr Silajdzic stepped up calls for the abolition of the RS which he said had now been found guilty by an international court of genocide, while a Bosniak initiative was also launched to take Srebrenica out of the jurisdiction of the RS, to which it has been subject since its fall in 1995. Mr Dodik, although conceding that what had happened in Srebrenica had been a ‘horrific crime’, rejected the judgement of genocide. A few weeks later, in a meeting in Belgrade, he floated the idea of Bosnia becoming a federal state. This was understood in the Bosnian and former Yugoslav context to have two meanings. The first is that Mr Dodik already supports the idea of a Croat ‘third entity’ in Bosnia, which is supported by many Croats. However, within the former Yugoslav context, federalism is understood to give the right to self-determination to republics, which in the current Bosnian set-up the RS does not have.

Thus, it is with this in mind that one should understand the failure of the latest round of talks on police reform over, what to outsiders, seems a somewhat arcane matter. For the last three years OHR and the EU have demanded police reform. The reason for this is not just that there are too many police forces and too little cooperation between them, especially between the Federation and the RS, but also because of the political power that can be exercised through them. Initially the EU demanded that policing districts be redrawn so as to straddle what is called the Inter-Entity Boundary Line (IEBL) between the Federation and the RS. The Serbs rejected this out of hand. Today, police reform is the most important condition of the EU before it signs the already prepared SAA document. On 16 March Olli Rehn, the EU’s Enlargement Commissioner, came to Sarajevo to demand that Bosnian leaders strike a deal. They came close, but not close enough. What they agreed was that there would be a new state-level Ministry of the Interior and that the RS police, or its components, would be part of this structure as opposed to being an entity body. However, the deal collapsed because Mr Silajdzic demanded that the RS police, in view of the ICJ judgement, no longer bear this name, which was important symbolically for Mr Dodik in making his concessions over control. For Mr Silajdzic, if he succeeded in realising this demand, then Mr Dodik argues, he would move to having the name of the RS abolished, followed of course by the RS itself. In the meantime, the earlier problematic issue of policing across the IEBL is no longer in question. That is no longer being discussed. The fear is now that unless a deal is made by mid-April at the latest, then thanks to EU timetables, the opportunity will be lost to sign the SAA this year and Bosnia will continue to lose –quite apart from any benefits coming from the SAA itself– the foreign investment flowing from the fact that the agreement is widely seen as an EU stamp of approval.

In the meantime, such major philosophical and political problems facing Bosnia and its future have been impacting on its economy. Decisions over much needed economic reforms have not been made for the last year and the country suffers from the fact that different rules and regulations apply in each entity. For example, corporate tax is now 10% in the RS, which encompasses even parts of the Sarajevo suburbs, and 30% in the Federation. Real GDP growth, estimated at 5.5%-6% in 2006 is likely to stay at this level for the next year or so as Mittal Steel increases production at its Zenica plant. In the RS, 65% of Telekom Srpska has been sold to Serbia’s state-owned Telekom Srbija for €646 million while the government hopes to sell two oil refineries to a Russian buyer.

Conclusions: It is easy to become despondent about the future of Bosnia, but perhaps the most remarkable thing is how, for a post-conflict state, so much progress has been made since 1995. Thus, difficult periods can be expected and with continued international care and attention, overcome. However, it is also clear that Bosnia, being such a peculiar and dysfunctional state, will rely for the foreseeable future on positive developments in the neighbourhood. In that sense its future is, as it has always been, hitched to that of Croatia and Serbia. Croatia, for the moment is uninterested in Bosnia and interested in joining the EU as soon as possible. Serbia is lagging behind and serious problems can be foreseen in this year in which the fate of Kosovo should be decided. The sooner Serbia is back on track towards the EU, then politics in Bosnia will become simpler as Serbia’s leaders lose interest in it and of using it by raising the spectre of a trade of Kosovo for the RS. Once that happens Bosnia should, in effect, get dragged behind Croatia and Serbia towards Brussels. The other real risk in Bosnia, however, is that continued political gridlock and persisting long-term differences on how the state should be constituted –ie, one state with one government or one country with two or three powerful entities– means that to a great extent the issue of why the war was fought still lingers over everything. Likewise, the fact that its children are educated separately bodes ill for the future in that Bosnia remains that most strange of states, which is to say a country without people: no Bosnians but rather Bosniaks, Serbs and Croats. 

Bosnia has come a long way since 1995 but this year, and in coming years, it needs to face major challenges and to find successful ways to adapt and reform or else, in the long run, risk political decomposition.

Tim Judah
Journalist. The author covers the Balkans for the Economist