Europe’s efforts to reconstruct Bosnia hampered by setbacks

Date: 15/02/1996

IT WAS almost as if some Greek god of ancient mythology had looked over the Yugoslav hills and, seeing western Europeans becoming confident and proud of their own projects, decided to let loose a lightening bolt to remind them just who was boss.

The EU has felt a series of shocks in recent days.

First, Bosnian Croats trapped the EU-appointed administrator of Mostar in his car and pounded on it. Then Bosnian Serbs boycotted meetings with European officials in anger at the seizure of two of their officers sought by the war crimes tribunal in The Hague. Even Bosnian Muslims protested over what they perceived as European leniency towards the Serbs in Sarajevo, when International High Representative Carl Bildt said Serb policemen could stay in the city a little longer than originally planned.

Is everything falling apart?

Only a few days before the bolts struck, diplomats and NATO officials, nearly blushing and barely daring to say it aloud, muttered something about “success” in Bosnia. The once-warring parties seemed to be adhering to the terms of the peace treaty, weapons were being withdrawn, prisoners were exchanged, there was even a timid return to pre-war night-life.

NATO and military leaders, however, made it clear that they would not be responsible for more than a tiny fraction of the job that still remains to be done in Bosnia. Some of them (American) said they might not even hang around to watch.

The EU has an enormous task before it. It asked for the responsibility of overseeing the rebuilding of Bosnia and now it very nearly has it.

“The European Union is prepared to shoulder firmly the responsibility of the international community regarding reconstruction and rehabilitation,” announced Foreign Affairs Commissioner Hans van den Broek at a gathering of international donors in Brussels last December.

The challenges of reversing the process of ethnic partition and restoring multi-ethnic peace are overwhelming.

Only a quarter of the 400-strong UN police force is on site, only a few of 52 indicted war criminals are on their way to the tribunal in The Hague, refugees claim they are being prevented from returning home, Muslims are still missing and Sarajevo's Serbs are still fleeing the Muslim-administered city.

The Commission is not responsible for solving those problems. But Bildt, who is, has said that reconciliation is impossible without the reconstruction money. The formerly warring parties need to see tangible benefits from having put down their guns or surrendered territory, or the fragile peace may not last.

As co-sponsors of the international reconstruction effort, it is the responsibility of the European Commission and the World Bank to raise the money needed for the job.

But firm pledges of funding are still thin on the ground. Of the 4 billion ecu the Bosnian government claims it needs, only a few hundred million has arrived so far. The EU promises “up to 1 billion ecu” by 1999, and has so far released 62.5 million ecu as the first tranche of an “essential aid programme” the Commission is running from its office in Sarajevo. But apart from the World Bank's own pledge, no other money has been forthcoming.

The two aid coordinators still plan to hold a donors' conference in April, but officials are reticent when asked what they expect to come out of it. Until donors agree on who should receive money, the contributions are likely to be slow, and getting agreement will not be easy. The World Bank and Bildt differ on the priorities for the aid and many donors disagree about whether the Bosnian Serbs should receive any.

Although officials from the European Investment Bank attend donors' meetings, they have not yet put any money aside for loans to Bosnia. When they do, one EIB official said, “will depend on how quickly the Commission can get its arms around the situation”.

EU and member state grants must come first, “to make projects bankable”. And, as the official made very clear, banks only loan money when they believe it can be repaid.

That does not bode well for Bosnia's short-term needs. Loans are slower to come than grants, and may be expected to make up the bulk of the reconstruction money.

Since the war in Lebanon ended in 1991, 80&percent; of the 2 billion ecu made available to the Lebanese government for reconstruction has been in the form of loans.

The World Bank and the EIB are still disbursing aid to Lebanon, a country with one-quarter the land area and three-quarters the population of Bosnia.

A report from the Council for Development and Reconstruction published in August last year makes clear that three years after the reconstruction effort began, a large portion of the funds have not yet been translated into completed projects.

“When the EIB decides to make a loan, it can take from two months to three years for it to be disbursed,” said the EIB official.

Carl Bildt, barely concealing his concern when describing the threat of some 100,000 Serbs fleeing Sarajevo, says the international community must not wait that long.

He is not alone in believing that war looms again if reconstruction does not get under way quickly.

The Bosnian government also understands the problems involved in loans and, in a statement to donors, insists that “the implementation of the reconstruction programme be based on cash and grants as much as possible”.

It is also pushing to become a full beneficiary of normal EU economic programmes, such as the Phare reconstruction programme for the nations of Central and Eastern Europe, and closer political ties.

Bosnian Foreign Minister Mohammed Sacirbey, attending the first Commission-World Bank donors' conference in Brussels last December, continued his campaign for Bosnia's integration into Europe. Bosnia was “within” Europe, not “on its doorstep” he said. Alluding directly to full membership of the Union, he added that economic and political integration would cement the success of reconstruction.

Van Den Broek responded that the Union would keep association and eventual membership for Bosnia in mind, but would focus, for now, on the immediate task of rebuilding the war-wrecked region.

The Commission's essential aid programme has concentrated on repairing water and electricity supplies, hospitals, schools, housing and transport, for which supplies are to be in place this month.

This itself has brought Bosnia half-way into the Phare programme, and Van Den Broek has said he hopes to make Bosnia a full beneficiary soon.

These days, however, talk of closer integration seems more and more difficult to imagine for EU officials smarting from the Mostar and Sarajevo setbacks.

“At this juncture, things are far too unclear,” said one. “The long-term aim is cooperation, but these are very serious incidents.”

Officials at every level, from foreign ministers down, will be deployed to try to calm the disputes and reconcile the three groups, he said. But he added: “If that doesn't work, well then we are in a very difficult situation.”