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BOSNIA AND HERZEGOVINA
>> Regional Overview >> Bosnia and Herzegovina Overview 
Introduction
Maintaining the peace in Bosnia and Herzegovina (Bosnia) is of direct importance to U.S. strategic and economic interests in Europe. Southeast Europe remains fragile in the aftermath of the Kosovo Conflict and North Atlantic Treaty Organization (NATO) campaign. The region’s economy suffered during the conflict and the disruption of traditional trade relationships creates further strain. Bosnia is experiencing its fifth year of peace, but Milosevic’s continued support of hard line Republika Srpska (RS) politicians, and the recent revelations of spying and interference by Croatia’s former government in certain Federation cantons, makes it very clear that Bosnia’s neighbors have not fully accepted that peace. With the election a new, pro-Western, reform-oriented government in Croatia in January 2000, greater cooperation with the international community on Dayton Accords implementation is expected. Bosnia needs the strong partnership of the United States to continue its economic recovery and enjoy long-term peace.
The Development Challenge
Bosnia is faced with a dual challenge: simultaneously move from a socialist to a market economy and recover from the war. For the recovery to be sustainable, it must be based on a more democratic society. The most immediate task continues to be economic revitalization to create jobs and incomes. The country also must continue to build the legal and institutional framework for a private sector, market-led economy.
Significant inflows of foreign assistance continue to fuel economic growth. Estimates vary, but most analysts accept World Bank figures for GDP growth: 62% in the Federation and 25% in the RS in 1996, 35% in the Federation in 1997, (RS flat), 22.5% in the Federation and 9.7% in the Republika Srpska (RS) in 1998. GDP was negatively affected in 1999 when the Kosovo conflict interfered with trade, and disrupted or destroyed supply arrangements.
The establishment and strengthening of critical economic institutions and the implementation of economic reforms are central to promoting a secure and prosperous future for Bosnia. Movement, however, towards achieving these goals has been slow. Many of the constraints to achieving macro economic goals continue to be political or ethnic. However, some progress has been made. The Central Bank made the Konvertibilina Marka (KM) acceptable officially and popularly. Bosnia has been accepted for World Trade Organization (WTO) observer status and the first steps have been taken to dissolve the central payment bureaus.
Minority refugee returns have grown steadily since 1996. UN High Commission for Refugees (UNHCR) conservatively estimates that 56,000 will have returned in 1999. A larger number are expected to return in 2000. The provision of basic services such as water and electricity and the resumption of economic activity will enable returning refugees to be reintegrated into their communities with gainful employment and acquire a stake in a lasting recovery.
Challenges in moving toward a democratic Bosnia remain formidable given the Government of Bosnia’s reluctance to embrace the changes needed to establish a participatory democracy, and the low level of civic and political activism among citizens. Holdovers from communist times such as authoritarian governments, with rubber-stamp parliaments and weak judiciaries, hinder progress. There are few checks and balances between branches of government. Fifty years of communism and a bitter war have inhibited Bosnian civil society. Citizens remain generally disengaged and apathetic towards government and civic involvement. Government corruption and lack of accountability promote apathy rather than protest.
Bosnian election officials have developed the capacity to carry out their responsibilities with limited international assistance, and will be fully responsible for the first time since the Dayton Peace Accords for conducting the national elections to be held in Fall 2000. Each post Dayton election has contributed to emerging political pluralism by eroding single party hegemony, but non-nationalistic parties continue to require assistance in developing practical campaign agendas, constituencies and democratic internal structures.
The media, both broadcast and print are in transition, but continue to operate in a murky legal environment. The Independent Media Commission (IMC) has begun to impose minimum international standards of broadcasting and discipline, including respect for intellectual property rights and punishment for media that churn out hate messages. Many broadcast stations will not survive due to unsound business practices, the excessive number of stations artificially supported by outside donors and an economy that is beginning to feel the impact of reduced donor levels. Other weaknesses include passive neophyte journalists reluctant to challenge authority, as well as occasional incidents of terrorism against journalists.
Although progress toward establishing rule of law and the protection of human rights was made in 1999, Bosnia’s judicial system remains far from independent, effective and professional. Human rights abuses still occur. Political parties continue to dominate judicial selection and political pressure ensures that courts rarely reach decisions on controversial cases. Due to these fundamental problems, few Bosnians consider the judicial system a guarantor of essential human or civil rights.
Against this background, U.S. assistance remains a critical element for creating both the economic and democratic institutions necessary to sustain peace in Bosnia over the long term. While other donors play significant financial and policy direction roles, the U.S. program serves as a model and catalyst.
Humanitarian Assistance
An estimated $14.748 million in PL 480 Title II commodities and transportation were provided in FY 1998 for emergency feeding requirements in Bosnia. Another $12 million was budgeted for FY 1999.
Other Donors
U.S. assistance is part of a broad-based, priority reconstruction program that is spearheaded by the World Bank and the European Union, and involves close to 50 donors who have committed a total of $5.4 billion since 1996 for reconstruction in Bosnia. Final figures on donor commitments as of December 1999 will not be available until April 2000. However, preliminary figures indicate that the European Commission (EC) remains the largest donor to Bosnia. As of May 1999, the EC had pledged approximately $1.4 billion. The EC pledge does not include bilateral pledges made by European countries, totaling $1.35 billion. Including FY 2000 SEED funds, the United States has pledged approximately $1.114 billion. As of December 1998, the World Bank had pledged $590 million (source World Bank). This figure will rise with the inclusion of 1999 pledges. Multilateral and bilateral donors, international financial organizations, international organizations such the United Nations and the Organization for Security and Cooperation in Europe, and NATO work closely on implementing the Dayton Peace Accords at a variety of levels. Regular meetings of Peace Implementation Council members help prioritize broader program policies and set concrete implementation objectives. On-the-ground coordination, through sectoral task forces covering issues such as economic reform, institutional reform in the utility sectors and refugee returns, strengthens donor effectiveness and maximizes U.S. assistance program resources by leveraging other donor funding, avoiding project duplication, and ensuring that constraints to implementation are addressed as common donor concerns.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: January 18, 2001 |
