Globalaffairs

Issue 1/February-March 2007
By Fernando de Sisternes

Sarajevo, 2006 December the 13th. It is a cold December morning in Sarajevo and at the headquarters of the main gas distribution company of the country, its president and the local minister for energy affairs are meeting. Today they are hosting one of the numerous consulting teams that have streamed into Bosnia with the aim to contribute to the country´s situation restructuring after the war that, during the early nineties confronted Muslim-Bosnians (Bosniaks), Croatians and Serbs for the territorial control and defence of the resulting fragments from the disintegration of Yugoslavia.

Once introductions have taken place, the meeting turns to discuss the present situation of the gas sector in Bosnia. One of the experts asks the minister why companies with the intention to develop the national gas infrastructure, and who know its requirements, have not yet begun to work on these projects. The minister quickly answers, responding resolutely that there is not agreement between the two integrating parts of Bosnia (one region of Serb majority and another region of Croat and Muslim majority) since both regions’ demand is that the new expansions begin from their respective demarcation.

This problem, which should not present an insurmountable obstacle, provided the competent authority passed a resolution in that regard, in Bosnia takes a special shape due to its current political paradigm. Providing evidence of this, and mirroring the present situation in which the country finds itself, the minister asserts with resignation that the ultimate responsible authority of these affairs – the Department of Energy of the MoFTER (Ministry of Foreign Trade and Economic Relations), energy authority at a national level – possesses the same decision-making power as the respective provincial ministries and in order to achieve a solution, both need to fully agree. This mechanism, which openly favours blocking most of the initiatives, is a general reality among Bosnian institutions, constituting in many cases the greatest hindrance to the development of this and other sectors within the country.

For a centralized European mind, this lack of authority of such an important institution for a country might seem surprising and incomprehensible. However, this widespread reality amongst most Bosnian institutions comes from the agreement that ended the conflict that has marked the course of the late years in this region in the Balkans. To understand the reason for this situation one has to go back in time more than a decade, to the origins of the present circumstances of Bosnia.

From Dayton 1995 to Brussels 2020

In 1995 The Dayton Accord ended a war that had begun three years before with a confrontation among the three majority ethnic groups of this Balkan region (Bosniaks, Serbs and Croats). The trigger had its origins in serious social and political crisis, derived from the fragmentation of Yugoslavia and an exacerbated Serb nationalism, aspiring to increase its territory to shape a “Great Serbia”.

After more than three years of conflict a peace agreement was finally signed in Dayton, Ohio. Motivated by the great ethnic dispersion in the region (Serbs or Croats settled in Muslim majority areas and vice-versa), the agreement did not opt for the creation of new states or the adhesion to Croatia or to Serbia the strips of their respective ethic majorities. Ultimately, it was decided that, under a common denominator, Bosnia, the country would be divided into two entities: one under control of the Serb majority (Republika Srpska) and a second of Croat and Bosniak majority (Federation of Bosnia and Herzegovina).

The Dayton Accord entrusted the international community with the protection of the borders of both entities, and appointed a High Representative for its supervision. The resulting small government is presided by three members (one for each constituent ethnic group) rotating every eight months. This government is composed of two houses, whose constituents have to be equally appointed between the three social groups in the country. Hence, each entity would have its own government with a composition that achieves the essential target: the total and proportional representation of every ethnic group.

Today Bosnia is still divided in the two entities derived from the Accord, and a small special zone Brčko District, of barely 200 square kilometres, controlled by Republika Srpska and the Federation. Presently, while the High Representative office will close in June 2007, being substituted by an EU representative, still around 6000 UN and NATO soldiers ensure the observance of the resolutions agreed upon in the Dayton Accord.

Like Croatia, Serbia and other neighbouring countries, Bosnia is a country that looks at Europe as part of its development perspective. In 2005, Brussels approved beginning talks with the Balkan country to establish an adhesion program, in exchange for a commitment to perform institutional reforms and fully cooperate with The Hague Tribunal in the detention of war criminals. Even though some of them are still fugitives, the large majority of these criminals have already been handed in to be judged for atrocities like the one in Srebrenica, committed during the years of confrontation.

Nevertheless, even though the regional stability has substantially improved, there are still disagreements and mistrust amongst the two entities that comprise Bosnia. According to an opinion poll published by the United Nations Development Program (UNDP) in its last periodic report on regional stability, an average of 60% of the country’s population would regard marriage between a relative of their’s and someone from any other ethnic group as unacceptable. After all, about 20% of the Bosnian population still disapproves of the multiethnic composition of the country.

The last electoral campaign, held in 2006 October the 6th, reflected how major candidates’ speeches are still based on nationalistic rhetoric. While the Bosniaks intend to boost the power of the central government, the Serbs claim the autonomy of Republika Srpska and the Croats the division of the Federation. This political radicalisation does not at all benefit regional stability or the process of joining the EU, which is supported – as opinion polls show - by 76% of Bosnian citizens.

However, other surveys carried out by the same institution - published in its latest report on regional stability – show that, although there is certain mistrust between the different ethnic groups that participated in the war one decade ago, this rivalry is not regarded with such importance by the common citizen. Problems like unemployment -officially 45% of the population is without legal employment- or economic stagnation, are the most worrying issues for the people in both divisions. Moreover, as the same source shows, 68% of the population believe that corruption, one of the most serious and harmful practices within a state, is quite or very extensive in every Bosnian institution.

After all, due to the ethnic dispersion in the territory, Bosnia is a country with very few chances if there is no understanding between its divisions. For this reason, it should try to put aside old quarrels and look ahead in a constructive way towards a united and integrated future, along which it can walk steadily towards conversion with Europe.

“Arrested” development

During the last twelve years, Bosnia has been the protagonist of one of the fastest reconstructions between countries that have suffered a war of such tremendous repercussions. However, with the reconstruction and consolidation phases over, the amount of aid coming into Bosnia has diminished due to the appearance of new international conflicts that require international aid and, to a certain extent, because of disillusionment among donor organizations produced by the slow pace of institutional reforms in the country.

Therefore, Bosnia currently is situated at a key point, in which in order to keep on with its development, it should offer incentives to national industry and foreign investors, progressively abandoning their dependence on international aid. As previously discussed, the indispensable condition that makes this development possible is institutional change. It is very frustrating for the population to see how a country with such development potential is hindered by a divided and inefficient institutional framework.

A re-interpretation of the Dayton Accord might provoke the aforementioned institutional change, preserving at any time the defence of the institutional representation of every ethnic group, but fortifying the central government institutions in a fiscally sustainable way. Consolidating the functions on key aspects, fragmented along the different governmental levels, not only would this significantly improve the effectiveness and efficiency of the country’s government, but it would also provide a greater capacity to comply with the compromises of the process of integration with the EU.

An example of this institutional segregation is the present situation of the energy sector in Bosnia. According to Mubera Bičakčić, Head of the Department for Energy at the MoFTER, currently the restructuring of the energy sector is the highest priority on the Bosnian agenda in order to guarantee the energy supply to the entire country and establish a free and competitive market that benefits the consumer and boosts industrial activities. Nonetheless, today there exist three different laws regulating the sector (one per each of the two entities and a third at the national level), three regulatory commissions, two action plans for restructuring the different energy sectors, and not a single economic space.

All of the above creates serious harmonization problems, considering the reluctance to change from the entity authorities’ side, favouring a lack of consensus on strategic issues. Hence, the immediate solution is strengthening the authorities at a state level through the appropriate legal and constitutional reforms, endowing them the power to determine unanimously the country´s objectives or, at least, providing a mechanism to develop solutions for breaking deadlocks between the three ethnic groups. As a matter of fact, although they still need support to overcome the barriers found, a prospective integration into the EU is proving to be an engine to accelerate the changes.

Bosnia is facing a crucial challenge in its history that has to be overcome in order to escape from the stagnation in which the country is currently immersed. For this reason, the leaders of this country must commit themselves to state construction, rejecting any kind of political radicalisation and handing over responsibilities from local and entity governments to national ones. This is the only way that Bosnia will foster the dialogue and consensus necessary for the creation of stable regulatory frameworks that set common objectives and provide the country with the institutional security required for a solid and sustained development.

Fernando de Sisternes
Graduated in Industrial Engineering at Carlos III University of Madrid

Global Affairs is not liable for author’s opinion