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Bosnia fours years after the Dayton Accord: US and Europe preside over
ethnic partition and corruption

By Tony Hyland
25 January 2000

"As we take stock of where we are, we see what we lack for a truly
durable peace—a functioning sovereign state that unites all peoples of
Bosnia and Herzegovina; an economy free from political influence and
corruption that can provide jobs and stability; and the ability for all
refugees and displaced persons to return to their homes." ( From a
statement by the United Nations Mission in Bosnia, the Office of the
High Representative, the Mission of the Organisation of Security and
Co-operation in Europe [OSCE], and NATO)
This joint statement by the international agencies presently responsible
for Bosnia-Herzegovina amounts to an admission of failure on key aspects
of the Dayton Peace Accords, signed in November 1995. In an attempt to
salvage some credibility for the UN intervention, the agencies point to
the absence of war four years on. But this offers small comfort, as a
future resumption of armed conflict cannot be ruled out.
The term "peace" is an ill-fitting appellation for a situation in which
ultra-nationalists continue to dominate political life, refugees are
unable to return home and corruption is endemic throughout the power
structures of Bosnia-Herzegovina.
The US-brokered accord geographically split the former Yugoslav
republic, with a population of between 3 and 4 million, into two
entities, enshrining ethnic divisions. On one side is the Federation of
Bosnia-Herzegovina (the Moslem-Croat alliance), and on the other, the
Serb Republic of Bosnia-Herzegovina (Republika Srpska). The former
controls 51 percent and the latter 49 percent of the country.
This division was largely based upon the relative territorial advantages
the various protagonists enjoyed after two-and-a-half years of fighting,
which witnessed some of the worst atrocities that have accompanied the
dissolution of Yugoslavia. The Western powers extended economic and
military support to the Moslem-Croat alliance, formed under the auspices
of the US.
A NATO occupying force of some 32,000 troops, known as the Stabilisation
Force (S-For), polices the two entities. An Office of the High
Representative was set up by the US and the European Union. The position
concentrates extensive powers into the hands of Wolfgang Petritsch, who
took over the post in September 1999.
As High Representative, Petritsch can veto decisions made by the
governments in the two entities and remove from office uncooperative
local mayors and parliamentary deputies. Even the anthem and flag of
Bosnia-Herzegovina were chosen by the High Representative.
Western policy in Bosnia-Herzegovina continues an anti-Serb bias. Under
the Dayton Accord, the country's territorial division omitted the region
of Brcko, situated in the northwest. A final decision was to be made
within a year but was constantly deferred as the area was hotly
For the Bosnian Serbs it formed a hinge between the two halves of the
territory they controlled, whereas for the Moslem-Croat alliance in the
Federation, it offered an important commercial outlet to the Sava River.
Last year it was finally decreed to be a "neutral zone". This meant it
was controlled by the US military and effectively dissected the
Serb-ruled territory, leaving its western side flanked by Croatia on one
side and the Federation on the other.
The Western powers have groomed the present Republika Srpska prime
minister, Milorad Dodik, as their favoured statesman in the Serb
mini-state. He has renounced any association with the Milosevic regime
in Belgrade, and offered to comply with Western dictates.
The West has been assisted by the "collateral damage" from NATO's 78-day
bombardment of the Federal Republic of Yugoslavia. The levelling of
factories throughout Serbia proper cut off a major export outlet for the
Republika Srpska. In 1998 this had accounted for 70 percent of exports
and nearly a quarter of its gross domestic product. The annual value of
trade has since been halved to 350 million German marks.
An example of the integrated character of this trade is shown by
Cajavec, the company in Banja Luka that employed 2,000 people making
electronics components for the Zastava car factory in Serbia. When the
factory was destroyed by NATO bombs the Cajavec workers were deprived of
the outlet for their products. Other economic casualties in Banja Luka
include the Kosmos electronics plant and the Incel paper and plastics
business. According to the Republika Srpska Industry Ministry, 62,000
workers lost their jobs as a result of NATO's action.
The net result of this has been to make the Republika Srpska even more
economically dependent on inward investment and foreign aid, with the
preconditions attached to them by Western powers. Prime Minister Dodic
was quoted in the Financial Times saying: "The fact is that the Yugoslav
economy is now not strong enough to take our products, and we cannot
expect to have a market there like we had before the [Kosovo] war. We
shall now have to look to the entire Bosnia and Herzegovina market, and
to other countries."
The shaky foundations of the Federation of Bosnia-Herzegovina
The uneasy nature of the Croat-Moslem alliance is exemplified by the
situation in the southern city of Mostar. The city is split in two: the
western side inhabited by Bosnian Croats, the eastern side by Bosnian
Moslems. The freedom of movement claimed by the supporters of Dayton is
belied by everyday life. On the western side of the bridge over the
River Nevetva Croat cab drivers wait to pick up passengers dropped off
by Moslem (Bosniak) cab drivers in the east. The city has separate
police forces and schools.
The Federation's army is also fractious. The units are ethnically
segregated and under a separate ethnic chain of command. The two main
nationalist parties—the Croatian Democratic Union and the Moslem
Democratic Action Party—appoint personnel.
The obstructions preventing refugees returning and the maintenance of
military autonomy are ultimately bound up with Zagreb's plans to annex
Bosnian territory as part of a Greater Croatia. This is particularly the
case in the western part of the Federation, which is referred to as
"Herzeg-Bosna" by the Croatian ultra-nationalists.
While the Western powers have been preoccupied with subjugating
Republika Srpska and isolating it from the Federal Republic of
Yugoslavia, the predatory appetites of Croatia have gone largely
unchecked. In the recent period NATO has been obliged to rein in this
expansionism, particularly as it prepares to scale down its military
presence to 19,000 troops by April of this year.
The advanced state of these expansionist plans was shown by material
seized in a NATO-led raid last year in the Bosnian Croat sector of
Mostar, situated only 25 miles from the border with Croatia. The raid
was carried out on October 14, 1999 by a combined force of some 1,500
American, British, French, Italian and Spanish troops, and represented
one of the most extensive actions by NATO forces against Croat
nationalists in Bosnia.
Eight cubic meters of material were uncovered, including 10,000
documents, a cache of arms and truckloads of spying equipment.
Diplomatic officials claimed that it offered clear proof that Croat
forces were preventing the resettlement of minorities from areas that
had been ethnically cleansed, that they were protecting suspected war
criminals and that they maintained connections with organised crime. The
seized material included equipment for counterfeiting credit cards and
for the mass copying of pornographic videos.
Payrolls and other documents indicated a financial umbilical chord
between the operations in Mostar and the Croatian capital of Zagreb.
NATO officials said there was evidence of tax revenue being siphoned off
to the HDZ, then the ruling party in Croatia, which was used to pressure
Croatian military officers into supporting the party's agenda.
NATO and diplomatic officials say there were also clandestine payments
from Croatia to its hard-line counterparts in Bosnia, the full extent of
which are not known. Funds were being provided not only for intelligence
activities directed against various Western agencies, but also for the
wages of an estimated 10,000 Croats in the Bosnian army, as well as for
police officers in the Mostar region.
Although then-Croat President Franjo Tudjman was a signatory to the
Dayton Accord, he never accepted a state of affairs whereby Croats had
to share power with Moslems in the new Bosnian Federation. Those
advocating the incorporation of Bosnian territory into a Greater Croatia
have enjoyed considerable influence in domestic Croatian affairs. Known
as the "Herzegovina lobby," their leading spokesperson, Ivic Pasilic,
was Tudjman's main adviser until the latter's death last December 11.
Unlike the Serbs who were driven from their homes and disenfranchised,
Bosnian Croats are entitled to vote. Although they only constitute 9
percent of the electorate, they have specially designated
representatives in the Federation parliament known as "Diaspora
deputies," and make up the right-wing of the HDZ.
The Western media has fostered the perception that the Moslem Democratic
Action Party and its leader Alija Izetbegovic are models of ethnic
tolerance. However, Izetbegovic heads a party that was founded upon
religious exclusivism.
The Bosniak-controlled municipalities provide a base for Islamic
extremists. This was recently brought to light when a member of the
terrorist organisation, Mehrez Amdouni, was arrested in Turkey
travelling on a Bosnian passport. Local Bosnian officials permit
Mujahadeen fighters who had participated in the war in Bosnia to reside
in the villages of Bocnja and Pehare. A majority of these have been
granted citizenship and passports. They reside in the former homes of
Serbs and Croats, and present a major deterrent to the return of those
displaced from the region of Zavidovici-Maglaj.
Four years after the cessation of fighting, ethnic cleansing remains an
intractable problem. The United Nations High Commission on Refugees
(UNCHR) announced figures suggesting a return rate of over 27 percent
for refugees. However this is misleading. Many of these have not
returned to their former neighbourhoods, but to areas where they
constitute the majority ethnic group. A clearer indicator of
resettlement is offered by the number of "minority" returns, those who
have felt safe enough to return to areas where they are in the minority
and are unlikely to be offered houses seized through ethnic cleansing.
Based upon this criterion, the rate of resettlement is just 5 percent.
Market-orientated policies benefit criminal elements
Criminal elements have been the main beneficiaries of the Western
powers' economic polices in Bosnia-Herzegovina. According to some
estimates, the black market accounts for 40 to 60 percent of the
protectorate's economy. An article in the Washington Post on December
26, 1999 declared: "This has fuelled the rise of a wealthy criminal
class that wields enormous political influence and annually diverts
hundreds of millions of dollars in political tax revenue to itself."
A US House International Relations Committee fact-finding team sent to
investigate corruption found that in one of the cantons hundreds of
millions of dollars provided to the government by Western donors had
already been misappropriated. In another case, public funds earmarked
for the tombstones of war victims in the Serb-controlled area of
Srebrenica had disappeared.
Those layers seeking to take advantage of private enterprise have been
drawn from the criminal underworld. A prime example is the "Arizona
market" in Brcko. Its name is testimony to the patronage of US
capital—the Pentagon provided $40,000 of its start-up costs—and it
is referred to ironically as the "Wal-Mart" of Bosnia. Founded in the
NATO-policed "zone of separation", it was meant to be a flagship of the
free market for the rest of Bosnia. Three years on, it has become the
centre for trade in contraband and counterfeit goods.
As one representative of the OSCE stated: "Within Bosnia-Herzegovina
today, organised crime and corruption are more serious threats to
security and stability than military confrontation."
Some $30 million in uncollected taxes have accrued from the sale of
legal goods. With such large amounts of uncollected revenues, the $5.1
billion in foreign aid channelled into Bosnia-Herzegovina amounts to an
indirect form of subsidy to these criminal elements.
The transnational corporations feel aggrieved that these funds have not
been used to set in place the infrastructure that would enable them to
exploit this untapped market. As one think tank, the International
Crisis Group, commented: "Bosnia has become donor dependent. Were it not
for donor aid—which may account for 30 percent of official
GDP—economic growth would probably be negative. Little private
investment—foreign or domestic—has occurred in manufacturing....
Even the American hamburger chain McDonalds has been put off, and
Volkswagen is experiencing difficulties at every step of the way.
Politicians appear more interested in staying in power than in making
the needed structural changes in the economy that will attract private
The calls for more stringent measures against the criminal cliques have
more than a small dose of hypocrisy. Black marketeers traditionally
formed the constituency that opposed the centralised economies of
Eastern Europe. Having emboldened these elements, Western diplomats and
politicians now turn around and describe their activities as a remnant
of the "communist era." In large measure the attack on "corruption" has
become a euphemism for removing what limited social protection remains
for working people and speeding up privatisation.
There are small but significant signs that the avaricious drive of the
transnationals and the corrupt activities of the criminal/nationalist
cliques are beginning to encounter opposition. Last October tens of
thousands of demonstrators took to the streets of Sarajevo, the Bosnian
Federation's capital. They chanted anti-government slogans and carried
placards denouncing the war profiteers.
Since 1991, the continued dismemberment of Yugoslavia has provided NATO
and the US with an opportunity to project their military power beyond
their traditional boundaries. This has been based on carving out a
series of ethnically-based mini-states completely dependent on Western
finance capital and the transnational corporations. Nationalist cliques
have enriched themselves by seeking the sponsorship of one or another
major power. Such has been the reality of "self-determination" in the

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