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a report of the csis

europe program

November 2011

Principal Authors

Janusz BugajskiHeather A. Conley

Contributing Authors

Mihaela David

Terry Toland

A New Transatlantic Approachfor the Western Balkanstime for a change in serbia, kosova, and

bosnia-hercegovina


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a report of the csiseurope program

A New Transatlantic Approachfor the Western Balkanstime for a change in serbia, kosova, and

bosnia-hercegovina

November 2011

Principal Authors

Janusz Bugajski

Heather A. Conley

Contributing Authors

Mihaela David

Terry Toland


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ii

About CSIS

At a time o new global opportunities and challenges, the Center or Strategic and InternationalStudies (CSIS) provides strategic insights and bipartisan policy solutions to decisionmakers ingovernment, international institutions, the private sector, and civil society. A bipartisan, nonprotorganization headquartered in Washington, D.C., CSIS conducts research and analysis and devel-

ops policy initiatives that look into the uture and anticipate change.Founded by David M. Abshire and Admiral Arleigh Burke at the height o the Cold War, CSIS

was dedicated to nding ways or America to sustain its prominence and prosperity as a orce orgood in the world.

Since 1962, CSIS has grown to become one o the worlds preeminent international policyinstitutions, with more than 220 ull-time sta and a large network o aliated scholars ocusedon deense and security, regional stability, and transnational challenges ranging rom energy andclimate to global development and economic integration.

Former U.S. senator Sam Nunn became chairman o the CSIS Board o rustees in 1999, andJohn J. Hamre has led CSIS as its president and chie executive ocer since 2000.

CSIS does not take specic policy positions; accordingly, all views expressed herein should beunderstood to be solely those o the author(s).

Cover photo credit: Top, French Formed Unit (FFU) medal ceremony April 29, 2010 in Bel-vedere Camp in Metrovica, EULEX/Anisa Kasemi, http://www.eulex-kosovo.eu/en/inter-active/PhotoGallery.php; bottom,Sebian barricades in Zvean, http://en.wikipedia.org/wiki/File:Serbprotest2011.jpg.

2011 by the Center or Strategic and International Studies. All rights reserved.

ISBN 978-0-89206-689-6

Center or Strategic and International Studies1800 K Street, N.W., Washington, D.C. 20006el: (202) 887-0200Fax: (202) 775-3199Web: www.csis.org


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Introduction v

Executive Summary: Serbia and Kosova 1

1. Serbia and Kosova: Opening Roads to Partnership 3

Summary 3

Serbia-Kosova Dialogue in Perspective 3

Serbias Political Calculations 6

Kosovas Calculations and Vulnerabilities 8

International Involvement: Process and Substance 10

Policy Recommendations for Washington and Brussels 12

Executive Summary: Bosnia-Hercegovina 15

2. Bosnia-Hercegovinas Alternative Futures 16

Summary 16

Bosnias Challenged Statehood 16

Points of Transatlantic Contention 19

Bosnias Alternative Futures 27

A New Transatlantic Approach: Dynamic (and Radical) Policy Recommendations 29

About the Authors 32

contents


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For the past decade, accession to the European Union (EU) has become both the journey and thenal destination or peace and democracy in the Western Balkans. EU political and economicengagement in the region has had a proound and positive inuence, rom encouraging the ruleo law, human rights, and economic reorm, to establishing a regional dialogue. Te United Stateshas also been a key player in building a stable uture in the Western Balkans. Combined, the EUand the United States have provided close to $2.2 billion in assistance to Bosnia and Hercegovina,

Serbia and Kosova since 2009;1 most o the investment has ocused on developing a civil societyand an accountable government.

Despite these signicant investments, past transatlantic policy approaches are no longer ableto overcome the growing list o regional challenges that threaten to stall i not roll back progresstoward European integration. Although the EU bureaucratically continues to support the integra-tion o the Western Balkans, European political leaders oer no new enlargement narrative as theynd themselves overwhelmed by a political and institutional dilemma ueled by the Europeansovereign debt and banking crises and by the bureaucratic consolidation ollowing ratication othe Lisbon reaty.

Tere is little intellectual enthusiasm, vision, or political appetite or Western Balkan acces-

sion; as a result, EU enlargement rhetoric rings increasingly hollow in the region. It is not surpris-ing that many Western Balkan politicians openly question the sincerity o the EUs commitment tothe accession process. In Washington, U.S. policy toward the Western Balkans has not progressedover the last decade as regional policy making continues its long descent down the State Depart-ment bureaucratic ladder. Although strategic drif and distractions mount on both sides o theAtlantic, the politics and potential instabilities in the Western Balkans do not patiently or idlywait until the West rediscovers the region. Bosnia-Hercegovinas politically paralyzed governmentstructures, coupled with Serbia and Kosovas increasingly contentious relationship, marked withepisodes o violence, erode condence that the Western Balkans can overcome their legacy ointernecine conict.

It is time or urgent and necessary changes in both the current political and economic dynam-ics within the region, and in the transatlantic approach to the region. Simply put, transatlanticpolicy toward the Western Balkans is stuck in the policies o the 1990s approach and needs torespond to today and tomorrows regional and global economic, security, and political dynamics.Policy makers must understand that the guidance o the EU and the United States to achieve the

1. For Europe: http://ec.europa.eu/enlargement/potential-candidates/index_en.htm. For the UnitedStates: http://www.usaid.gov/policy/budget/cbj2011/2011_CBJ_Annex.pd.

introduction


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vi | a new transatlantic approach for the western balkans

promise o EU membership is no long sucient in and o themselves as policy tools. It is time orthe EU and the United States to devise an updated long-term road map or reorm and eventualEU accession to take place in the region, while tossing away an outdated policy playbook.

Tis road map should include a combination o powerul incentives or Balkan political lead-ers who are responsible or implementing key reorms and strong disincentives when they prevent

regional cooperation and stymie reorm. I EU membership appears to be unattainable, its ac-cession standards inconsistent, or U.S. leadership absent, more and more Balkans politicians willexchange pro-EU platorms or some variation o nationalism and nativism, as we have seen withRepublika Srpskas (RSs) prime minister, Milorad Dodik. It is imperative that transatlantic policytoward the Western Balkans is reocused and reenergized i it is to eectively guide the regiontoward a stable uture in the transatlantic community a policy goal which is within reach.

Based on extensive interviews and discussions with policy makers and analysts in Sarajevo,Banja Luka, Belgrade, Prishtina, Brussels, and Washington, this CSIS Policy Report oers recom-mendations to American and European policy makers or a new transatlantic paradigm or twoo the most signicant challenges in the Western Balkans, Bosnia-Hercegovina as well as Serbiaand Kosova. While it reects on current and at times opposing U.S. and EU assistance strategiestoward development and democratic reorm, the report recommends a new, twenty-rst century,transatlantic policy playbook or the Western Balkans inused with a realistic and long-term visionor the region.


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As demonstrated by the recent escalation o violence in northern Kosova, the antagonistic anddivisive relationship between Serbia and Kosova continues to create regional instability in theWestern Balkans. Te rst part o this report provides an analysis o the obstacles to normalizingrelations between Serbia and Kosova and to promoting good governance in both countries. It alsooers innovative options or the creation o a new transatlantic approach or promoting interstatecooperation.

Tis report also assesses the successes and shortcomings o the EU-sponsored bilateral

dialogue between Belgrade and Prishtina, where, or example, the recent agreements on techni-cal issues led directly to clashes along the border with Serbia. Te political motivations, hiddenagendas, and perceptions o the Serbian and Kosovar governments in engaging in these talks areexplored in detail, as are the strengths and vulnerabilities o both countries in the negotiationprocess. Te diering EU and U.S. objectives or, and expectations o, the bilateral dialogue arealso examined, as well as the eectiveness o the international communitys attempts to resolve thecounterproductive statehood dispute between Serbia and Kosova.

Key recommendations are oered to both Washington and Brussels; the aim is to advance thedialogue process and to oster greater regional stability. Tese include the ollowing:

Shif the ocus o the Belgrade-Prishtina dialogue rom purely technical issues to a broaderand more ar-reaching agenda to achieve more concrete political results. Include northernKosova and Serbia-Kosova border demarcations as subjects in the talks, ocusing on restoringand ensuring Kosovas territorial integrity.

Pursue a concerted campaign to expand Kosovas international recognition, beginning with theve remaining EU member states.

ransition rom Kosovas international supervision to the countrys development. Instead omanaging problems and sustaining dependency relations, ocus on ostering regional economicdevelopment, political competition, and democratic transparency. Develop cross-border civilsociety networks by involving nongovernmental organizations (NGOs), attracting businesses,and developing a middle class.

End the European Union Rule o Law Mission (EULEX) supervisory mission and transition toa robust and senior EU special representative (EUSR) with strong engagement and interactionwith the U.S. Embassy in Prishtina.

Include Kosova in EU visa liberalization and oer Kosova an EU Stabilization and AssociationAgreement (SAA) and a roadmap to candidacy status. Tis would incentivize conditions ordomestic reorm and provide the EU with greater inuence in Kosova.

executive summaryserbia and kosova


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2 | a new transatlantic approach for the western balkans

Te recommendations or bridging Kosova and Serbias dierences will orm the oundationo a new and reenergized transatlantic strategy or the Western Balkans that will result in greatereconomic integration and enhance economic and democratic reorms in the region.


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negotiations, the EU brokered a breakthrough deal on July 4, 2011 between Serbia and Kosova.Tis deal included agreements in three elds: issuance o certied copies o civil registry records toKosova using EULEX in Kosova as an intermediary, Serbian acceptance o Kosovar identicationcards to acilitate reedom o movement, and mutual acceptance o university degrees.1 Accordingto EU acilitator Robert Cooper, the agreements bring both parties closer to the European Union,they improve cooperation and they improve the lives o ordinary people.2 Although the deal didnot address or aect the status o Kosova, it was hailed by Kosovar negotiator Edita ahiri as arst step towards Serbias recognition o Kosova independence.3

All parties engaged in these talks have diering agendas, motivations, and perceptions aboutthe talks themselves. EU ocials perceive the talks as a demonstration that conicts can be man-aged eectively through European mediation and that practical problems between Serbia andKosova can be resolved with EU assistance. U.S. ocials generally share this perspective but theywould like to see the dialogue become an immediate catalyst or Kosovas recognition by all Euro-pean capitals (ve EU member states do not recognize Kosova) as an independent state.4

Serbias leaders view the talks as a means or satisying conditions in gaining EU candidatestatus and opening accession negotiations. While the EU Commission has recently recommendedthat Serbia gain EU candidate status, ormal accession talks cannot commence until Belgrade im-proves its relations with Prishtina. Tis said, the Serbian government also seeks to use the dialogueas a way to prevent or delay urther recognition o Kosova. Te government in Prishtina is muchless sanguine about the goals and outcomes o the discussions with Belgrade. Tere is a ear thatthere is a political cost to scheduling these talks which may ormalize the status quo ante and abelie that the Kosovars were pressured into accepting the dialogue without the prospect o anytangible uture rewards.

And there are costs as well. Serbian unwillingness to recognize Kosova customs stampsprompted the Kosovar government to introduce a ban on imports o all Serbian goods to recipro-cate the Serbian embargo on Kosova goods in place since the 2008 declaration o independence.5

On July 26, 2011, Kosova special police orces seized control o two border crossings in an attemptto exert sovereignty in the Serb-dominated north o the country afer EULEX ailed to enorce theKosovar embargo. According to Kosova prime minister Hashim Tai, this action was required torestore law and order in that part o the country. Te action raised tensions in the region as policeencountered resistance rom local Serbs who torched border posts, set up road blockades, andinjured several ocers. Kosovas unilateral action was criticized by the EU and the United Statesor being carried out without consultation with the international community.6

While the border dispute did not escalate beyond the border area, the violence lasted orseveral days and required the increased presence o NAO troops to take control o the border

1. Kosova, Serbia Reach Breakthrough Deal, Balkan Insight, July 4, 2011, http://www.balkaninsight.com/en/article/Kosova-serbia-reach-breakthrough-deal.

2. Ibid.3. Ibid.4. Five EU countries have yet to recognize Kosovas independence: Spain, Slovakia, Romania, the Re-

public o Cyprus, and Greece.5. Kosova Police Seize Northern Border Points, Balkan Insight, July 26, 2011, http://www.balkanin-

sight.com/en/article/kosova-police-seize-northern-border-points.6. Ibid.


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janusz bugajski and heather a. conley | 5

crossings.7 EU high representative Catherine Ashton condemned the violence and urged Belgradeand Prishtina to deuse tensions and restore calm and security, reiterating that dierences shouldbe resolved through the EU-led bilateral dialogue.8

Serbian deputy prime minister Bozidar Djelic accused Kosova o trying to thwart SerbiasEU eorts by raising tensions in the region, arguing that it was linked to the arrest o alleged war

criminal Goran Hadi and designed to provoke Belgrade.9 Kosova prime minister Hashim Taideended his actions by emphasizing that Kosova needs to control all o its territory; an agree-ment resolving the conict was nally brokered by NAO, not by the EU, on August 8, 2011. Tisagreement granted KFOR troops control o the border points until September.10 Te removal obarricades by Serbs in most northern Kosova municipalities, occurred in the days ollowing theagreement.

Tis incident highlights both the tenuousness and the ailures o the EU-sponsored Serbia-Kosova dialogue process. Serbian president Boris adiwarned that such unilateral actions byKosova have the potential to derail the progress o the dialogue between Belgrade and Prishtina.11German and UK oreign ministers Guido Westerwelle and William Hague, respectively, jointlyissued a warning that Serbia and Kosovas path toward EU membership will be jeopardized unlessthe two governments nd a diplomatic solution to their dierences that respects the borders oKosova.12 On a visit to Belgrade in August 2011, German chancellor Angela Merkel reiterated theprecondition that Serbia must resume dialogue and normalize relations with Kosova i it wants toachieve candidate status.13

On September 2, a compromise was reached on the customs stamps dispute, whereby Serbiaagreed to accept stamps marked Kosova Customs, and Kosova abandoned labels eaturing ags,state symbols, or the word republic.14 Te agreement resulted in the lifing o the mutual trade em-bargo and was regarded as a status-neutral solution. Te sixth round o negotiations also resultedin an agreement to return cadastre, or property records, to Kosova.15

Border tensions ared again between local Serbs in northern Kosova and KFOR orces ol-lowing the recognition o Kosova customs stamps: on September 16, Serb gangs tried to preventtwo border checkpoints rom being dismantled; they also tried to prevent the deployment o

7. Border Dispute with Kosova: Serbian Attackers Shoot at NAO Soldiers, Spiegel, July 28, 2011,http://www.spiegel.de/international/europe/0,1518,777117,00.html.

8. Statement by the High Representative Catherine Ashton on the Situation in Kosova, Council othe European Union, July 28, 2011, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/ora/124065.pd.

9. Upcoming Days Important or Serbias EU Integration, Balkan Insight, August 3, 2011, http://www.balkaninsight.com/en/article/upcoming-days-important-or-serbia-s-eu-integration.

10. Kosova Northern Border Crisis Resolved, Balkan Insight, August 8, 2011, http://www.balkanin-

sight.com/en/article/Kosova-kor-reached-agreement-over-the-disputed-north.11. Serbias adi Pledges No War over North Kosova, Balkan Insight, July 27, 2011, http://www.bal-kaninsight.com/en/article/serbia-strongly-condemns-Kosova-s-border-crossings-take-over.

12. Kosova and Serbia under EU Spotlight, Balkan Insight, August 9, 2011, http://www.balkaninsight.com/en/article/serbia-and-Kosova-will-miss-historic-opportunity.

13. Germanys Angela Merkel ies Serbian EU Hopes to Kosova, BBC, September 23, 2011, http://www.bbc.co.uk/news/world-europe-14631297.

14. EU Facilitated Dialogue between Serbia and Kosova: Agreement on Customs Stamps and Cadas-tre, Europa, http://www.eu-un.europa.eu/articles/en/article_11338_en.htm.

15. Ibid.


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Kosova customs ocials. Te Kosova authorities, however, only have a technical role to play inthis regard as the border and customs controls at the two crossings were taken over by EULEX,and KFOR remained responsible or guarding the crossings and providing security in the borderregion.16

While the Kosova government saw the customs agreement as an opportunity to take over

control o the northern Kosova borders, the Serbian government rejected the deployment o Kos-ovar customs ocials as part o that agreement. Following another violent incident on September27 in the border region, Serbias negotiating team postponed the seventh round o dialogue withPrishtina scheduled or September 28, leaving outstanding deals in the elds o telecommunica-tions, energy, and regional cooperation unresolved.17

Serbias Political CalculationsTe Serbian authorities are adamant that direct negotiations with Prishtina do not signal that itis prepared to recognize Kosova as an equal partner or as a ully edged state. Instead, Belgradesagenda or the talks involves a number o practical issues supported by the EU, including account-ing or people missing ollowing the 1999 war; responding to trac and telecommunicationsquestions, including easier border crossings; connecting air and ground transport and energynetworks; and legalizing documents or Serbs living in Kosova.

Soon afer the UN decision to mandate the bilateral dialogue, Belgrade named its own nego-tiating team and claried the topics o interest or Serbia. Te government o President adi ap-pointed the political director (third-ranking ocial) o the Foreign Ministry, Borko Steanovic, ashead o its delegation. Belgrades team does not include senior government ocials, as no memberholds the position o minister or state secretary, in order to minimize the appearance o legitimiz-ing interstate dialogue with a state that Serbia does not recognize.

Te adi administration places a high priority on the talks with Kosova as they were aprecondition or Serbias EU candidacy status; the EU still requires Belgrade to settle its outstand-ing disputes with Kosova prior to accession. Te EU enlargement commissioner, tean Fle,recommended on October 12, 2011, that Serbia be granted candidate status. He stated: On thebasis o the progress achieved in reorms, co-operation with the International Court ribunal orex-Yugoslavia, and regional reconciliation, I recommend granting Serbia Candidate Status, onthe understanding that Serbia re-engages in the dialogue with Kosova and is moving swifly tothe implementation in good aith o agreements reached to date.18 However, the EU did not set adate to begin ormal accession talks, stipulating that the negotiations be opened as soon as Serbiaachieves urther progress in normalizing relations with Kosova.

Te EU has laid out two additional conditions or Serbia prior to accession. Tese include

the implementation o domestic reorms, including judicial and party nancing reorm, as well as

16. Kosova Deploys Customs Ocials to Disputed Border Crossings with Serbia, Radio Free Europe,October 5, 2011, http://www.rerl.org/content/Kosova_deploys_customs_ocials_to_disputed_border_crossings/24330516.html.

17. Belgrade-Prishtina alks Postponed in Brussels, Balkan Insight, September 28, 2011, http://www.balkaninsight.com/en/article/belgrade-Prishtina-talks-cancelled.

18. tean Fle, Address to the Committee on Foreign Aairs (AFE) o the European Parliament,Europa, October 12, 2011, http://europa.eu/rapid/pressReleasesAction.do?reerence=SPEECH/11/652.


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ull cooperation with the Hague war crimes tribunal. Following the apprehension o indicted warcriminals Ratko Mladic and Goran Hadi in May and July 2011, Serbia, according to EU leaders,has come one step closer to realizing its European perspective.19

Belgrade views EU candidacy status as an important achievement that can attract voters in theupcoming parliamentary elections by May 2012 at a time when economic conditions have wors-

ened and growing public rustration with the government has been evident in large-scale streetdemonstrations organized by Serbias nationalist opposition.

An inherent obstacle acing the bilateral dialogue between Belgrade and Prishtina is Serbiaseorts to halt any urther recognition o Kosova, as 85 nations have already recognized its inde-pendence rom Serbia. By making the recognition seem contingent on the long-term outcome othe bilateral dialogue, Belgrade studiously avoids giving ground to Prishtina during the talks andin their opinion, Kosovas nal status is not being resolved. At a minimum, Serbia does not wantto alter the status quo in avor o Prishtina by signing any binding bilateral accords with a gov-ernment it does not recognize. Tis creates immediate problems in orging agreements, even onpractical issues, unless the EU nds creative ways to promote status-neutral solutions.

A third Serbian government goal in the bilateral talks is to ease domestic nationalist pressuresthat Belgrade is not doing enough to support its Serbian brothers in northern Kosova. Follow-ing the northern Kosova border dispute in July 2011, Serbian opposition leader omislav Nikolicblamed the government or doing nothing or the Serbs living in Kosova.20Although Kosovadoes not gure as a hot political issue within Serbia on a daily basis, it is and will be used by na-tionalists against the governing coalition in the orthcoming election campaign.

Indeed, a pro-EU center-right nationalist party, the Serbian Progressive Party (SNS) leads inpolls with 41 percent support, ahead o the ruling Democratic Party (DS) (24 percent), and the ul-tranationalist party Serbian Radical Party (SRS), but this rise in popularity has as much to do withdiscontent over rising prices, unemployment, and poverty in the afermath o the global economicrecession than the importance o Kosova.21

Te person within the government who is delegated with the responsibility to attract thenationalist vote is Serbian oreign minister Vuk Jeremic, who devotes his energies to campaigningagainst Kosovas international recognition. By continually reinorcing the public message that thedialogue with Prishtina is conducted under a UN mandate and that Serbia only engages in negoti-ations in pursuit o its national interests, Jeremic periodically injects into the process initiatives inorder to bring Kosovas statehood into question. He has launched an International Court o Justice(ICJ) process to obtain a ruling on Kosovas declaration o independence, mobilized the Yugoslav-era Non-Aligned Movement (NAM) against separatism, canvassed the UN General Assembly insupport o Serbias territorial integrity, appealed to Russia to back Serbias diplomatic maneuvers,and ocused on the Council o Europes investigations o Kosova prime minister Tai, discussed

in the next section, in an eort to delegitimize the government in Prishtina.

19. Joint Statement by President Van Rompuy, President Barroso and High Representative Ashton onthe Arrest o Goran Hadi, Council o the European Union, July 20, 2011, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/123971.pd.

20. Nikolic: Serbia Has Done Nothing or Kosova Serbs, Balkan Insight, August 5, 2011, http://www.balkaninsight.com/en/article/sns-leader-state-has-done-nothing-or-Kosova-serbs.

21. New Poll Gives Opposition Parties Lead, B92, April 6, 2011, http://www.b92.net/eng/news/poli-tics-article.php?yyyy=2011&mm=04&dd=06&nav_id=73645.


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Serbian government ocials have indicated that the partition o Kosova is their ultimateobjective, given that regaining control over the entire country is no longer easible. Some Serbiananalysts believe that the talks may become a smoke screen so that southern Kosova can be sur-rendered in order to obtain its northern districts or Serbia. In this scenario, Belgrade would beunwilling to accept the prospect o surrendering the Albanian majority districts in southern Serbiaas part o a potential territorial exchange with Prishtina. However, Belgrade would not recognizeKosova as an independent state but encourage the absorption o a truncated Kosova by Albaniaand o northern Kosova by Serbia. Serbian ocials are hoping or a uture grand bargain withirana over the heads o Kosovar leaders that will orge a historic agreement between Serbs andAlbanians (Belgrade president adis own words in a statement to the media on March 18, 2011)or, more precisely, between Belgrade and irana. Not surprisingly, his proposal has been exten-sively criticized in both Kosova and Albania.

Perhaps to sofen international criticism, President adi has stated that he was prepared tomeet with Kosova prime minister Tai despite allegations that the latter was involved in warcrimes during the NAO-Serbia conict. In December 2010, Dick Marty, a member o the Coun-cil o Europe (CoE) Parliamentary Assembly, issued a report that was adopted by the CoE, alleging

the killing o prisoners and the removal and illicit tracking o human organs by members o theKosova Liberation Army (KLA), in which Tai held a senior position.22 Despite these allegations,adi has stated that he would meet Tai or any other legitimate representative o the Albaniansin Kosova, but without recognizing the legitimacy o the government in Prishtina. No such high-level meeting has occurred thus ar.

Kosovas Calculations and VulnerabilitiesIn February 2011 and ollowing his reelection, Kosova prime minister Tai declared that he wasready to begin talks with Belgrade afer convening a more broad-based cabinet that included a

Serbian deputy, Slobodan Petrovic, the rst ethnic Serb to be appointed deputy prime minister.Out o the 16 cabinet ministers in the government, three are ethnic Serbs.23

Kosova has been adamant on three questions pertaining to its dialogue with Serbia: that itcannot call into question Kosovas nal status; that the borders o Kosova are inviolable; and thatSerbia must have no say in the internal territorial organization o Kosova. In an optimistic scenar-io, Prishtina calculates that the talks could begin a process that will normalize relations with Serbiaas an impetus or both Serbia and Kosovas eventual EU integration. Kosovas nal goal, howeverunlikely, is or the dialogue to conclude with the reciprocal recognition o Kosova and Serbia, themutual acceptance o territorial integrity, and the accession o both countries into the EU.

EU mediator and senior adviser in the oce o Baroness Catherine Ashton, Robert Cooper,asserts that the main goal o the talks is to remove obstacles that have a detrimental impact on thelives o the population in Kosova, to improve cross-border cooperation, and to make progress to-ward EU integration. However, EU policies and underlying motivations are questioned by Kosovaocials. Prishtina ears that the European Commission is more likely to accommodate Serbian

22. Council Adopts Dick Martys Kosova Report, SwissInfo, January 25, 2011, http://www.swissino.ch/eng/politics/Council_adopts_Dick_Martys_Kosova_report.html?cid=29328740.

23. Matthew Brunwasser, Kosovas Serbs Pressed to End Autonomy Push, New York Times, September29, 2011, http://www.nytimes.com/2011/09/26/world/europe/26iht-Kosova26.html?_r=1&pagewanted=2.


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positions during the dialogue because Brussels views Serbias European integration as essential tothe EUs policy success in the Western Balkans. Although the EU has used its pending decisionon Serbias candidacy status as leverage to pressure Serbia to normalize relations with Kosova anddeuse border tensions through diplomatic channels, the Commissions recent recommendation togrant Serbia EU candidate status conrms what Kosova ocials ear: the EU has become statusneutral vis--vis Kosova in an eort to bring Serbia closer to the EU, keep the United States at adistance, and not push the remaining ve EU members to recognize Kosova.

o counter these ears and perceptions, one o Prishtinas principal objectives or the dialogueis to prevent Belgrade rom setting the agenda o the dialogue. For example, Prishtina was suc-cessul in thwarting Serbian attempts to include the issue o the northern Kosova border crossingsin the seventh round o negotiations, calling these issues non-negotiable internal matters andprompting the Serbs to postpone the negotiation talks.24 Te EU did not give in to Serbias ultima-tum, maintaining that the situation in northern Kosova is not part o the dialogue and that onlytechnical issues would be on the agenda, suggesting that the dialogue would be resumed when theSerbian side was ready to reengage.25

Tere is no uniormity o views within Kosova about the dialogue. Te political oppositionin Kosova has openly called into question the legitimacy o the reelected Tai government ando the credibility o its dialogue with Serbia. Opposition parties also urged the government not tostart talks with Belgrade without the approval o the Kosova Assembly, insisting that parliamentshould adopt a resolution which would determine the topics o the dialogue. Tis request wasdisregarded by the government as pressures mounted rom the EU to launch the talks. Te opposi-tion believes that Belgrade and Prishtina should only enter into the dialogue as two distinct andmutually recognizing states and that both parties should benet rom the talks. Tey also assertthat the present dialogue avors Belgrade and sees no benets i new international recognition isnot orthcoming. Te opposition believes that Kosova needs to take more control o the dialogueas well as to receive extra sweeteners, such as visa liberalization with the EU.

Te Tai government ormed a team or the dialogue with Serbia headed by Deputy PrimeMinister Edita ahiri. Prishtinas agenda includes exchanging civil documentation such as the civilregister and the cadastre pertaining to Kosova but held by Belgrade; removing obstacles to coop-eration in the Central European Free rade Area (CEFA) and other regional initiatives whereBelgrade has blocked Prishtinas participation; ensuring reedom o movement through the recog-nition o passports, customs stamps, license plates, and driving licenses; the recognition o schooldiplomas by both states; developing telecommunications and energy links through harmonizationand liberalization according to EU principles; and the return o looted property.

Te recent breakthrough deals between Prishtina and Belgrade in several o the aoremen-tioned elds, as well as any uture agreements on remaining issues, will continue to be jeopardizedby the ongoing border dispute in northern Kosova. Te Kosova governments attempt to enorcethe embargo on Serbian goods and establish control over northern Kosova borders was a sign oPrishtinas dissatisaction with the pace o the EU-led dialogue process. It also reected Kosovassuspicion o Serbias willingness to genuinely engage in the negotiations and ollow through onits commitments. In concert with EU pressure, Prishtinas policy paved the way or a diplomatic

24. Ibid.25. EU Facilitated Dialogue: Serb Delegation Not Ready to Continue the alks oday, Europa, Sep-

tember 28, 2011, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/ora/124775.pd.


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solution to some outstanding border issues such as the ree movement o goods and recognitiono Kosovar custom stamps. Nonetheless, Kosovas actions in July and the deployment o Kosovarcustoms ocials in September ell short o gaining ull control o border checkpoints, which arecurrently managed by EULEX while KFOR provides security. Furthermore, Kosovas actions mayhave temporarily succeeded in complicating Serbias EU candidacy bid, but did not prevent it romreceiving the Commissions recommendation to be granted candidate status. It is unclear whenKosova and Serbia will return to the negotiating table to nd solutions on several outstandingtechnical issues, but the opening o Serbias EU accession talks is contingent upon resumption othe dialogue and normalization o relations between the two countries.

International Involvement: Process and SubstanceSoon afer the passage o the UN General Assembly resolution 64/298, Request or an AdvisoryOpinion o the International Court o Justice on Whether the Unilateral Declaration o Indepen-dence o Kosova Is in Accordance with International Law in September 2010, signicant pressurewas exerted by the EU on Prishtina to engage in the dialogue with Belgrade, particularly rom the

oce o Baroness Ashton, the EUs high representative or oreign aairs and security policy, andspecically rom her senior adviser, EU acilitator Cooper. Politicians and analysts in Prishtinaviewed the talks with pronounced suspicion earing that it could result in possible territorial con-cessions to Belgrade. As a result, Kosovar ocials asserted that the question o northern Kosovawould not gure on the agenda as it constituted an internal political issue.

Te nonparticipation o Serbs rom the Mitrovica region in Kosovas general elections andtheir boycott o Kosovas institutions, pose the greatest challenge or Prishtina as it reinorces parti-tion as a viable policy option. Almost entirely outside o Kosovas legal system, northern Kosovahas become, and will remain, its main source o instability with ar-reaching implications or se-curity, regional integration, and economic development. Although Prishtina may accept extensive

decentralization vis--vis its northern province, it will not countenance any orm o autonomy thatcould turn Kosova into another Bosnia-Hercegovina with two entities that paralyze the centralgovernment. Te increased level o instability o northern Kosova was highlighted by the afer-math o Prishtinas move to seize control o the border crossings in this region, which triggeredviolent conicts, prompted international condemnations, and resulted in NAO supervision o theborder.

In some respects, Prishtina and Belgrade are holding each other hostage: without Belgradesagreement Prishtina cannot join international organizations, and without Prishtinas consentBelgrade cannot progress ully on it path toward EU membership. Te goal o the bilateral nego-tiations under EU auspices was to help both sides escape this hostage situation. Te EU expectedsome concrete progress rom the talks by November so that its progress report on the status o

Serbias EU pre-accession status issued by the close o 2011 would prove avorable. Despite recom-mending granting Serbia candidate status, the EU views the current border disputeironically aby-product o the bilateral dialogueas an obstacle that needs to be overcome i accession nego-tiations with Serbia are to be opened.

Te EU understands that the current political situation in Belgrade provides a window o op-portunity. Clearly, a concrete oer o an EU prospect or Serbia can mitigate an election victory bynationalistic orces in the next Serbian general election. However, not all EU members support thecontinued enlargement o the EU. Serbian ocials worry that certain EU members, who want to


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slow down the EU enlargement process, may use Prishtinas unilateral moves as an excuse or post-ponement o the talks on Serbias EU accession.26 Te German ambassador to Kosova, Hans-DieterSteinbach, warned that sometime during the EU integration process the issue o Kosovas recogni-tion will come up and Serbia would need to recognize Kosova and the integrity o its borders.27

o what extent are Belgrade and Prishtina the owners o the negotiating process? I the EUs

inuence is centered on Belgrade due to its EU ambitions, then Americas inuence is elt primar-ily in Prishtina, which sees the United States as a security guarantor, along with NAO, o stateindependence. Washington has stated that it would play a supportive role in the talks and is con-tent that the EU convenes the parties, sets the agenda, and takes the lead role in the dialogue. Forits part, the U.S. government will continue to press Prishtina to participate, but it has asserted thatthe talks should not tackle the question o Kosovas status, border changes, or territorial integrity.During the July border dispute, a U.S. State Department spokesperson noted that ree movemento goods between Serbia and Kosova should be addressed within the European Union-acilitateddialogue and reiterated U.S. condence in EU management o the negotiations.28 Te U.S. ad-ministration may have also calculated that i they assumed a more prominent role in the dialogue,it would push Serbia into requesting that Russia also join the dialogue. Kosova is not viewed as a

positive item to add to the U.S.-Russian reset agenda.

Some analysts and ocials privately state that without stronger U.S. involvement in the Serbia-Kosova dialogue coupled with the continued lack o recognition by ve EU member states, thereis the potential or the EU to veer rom status neutral to status negative regarding Kosovasstatehood. Tere is also ear that partition o Kosova could ultimately be seen as a viable optionin Brussels in its overt desire to satisy Belgrade, thereby intensiying Albanian nationalism andbringing orth destructive regional conicts.

EU management o the most recent border dispute and the Serbia-Kosova conict in gen-eral has come under criticism. Britains minister or Europe, David Lidington, was critical o EUoreign policy chie Ashton or not appointing a permanent EU special representative in Kosova,

which sends the wrong message to Prishtina when it needs encouragement.29 Te mandate othe current EU special representative Fernando Gentilini, was supposed to end in July, but wasextended until September due to the escalating conicts.30 Some observers blame the currentstando on the EU, arguing that it made a historical mistake or not having integrated all oYugoslavias successor states in one ell swoop afer the wars o succession and that these countrieswill remain Europes Achilles heel until they all become members o the EU.31

26. Upcoming Days Important or Serbias EU Integration.

27. Serbs Will Be Asked to Recognize Kosova, Balkan Insight, July 18, 2011, http://www.balkaninsight.com/en/article/serbia-will-be-asked-to-recognize-Kosova.28. State Department on Events in Northern Kosova, U.S. Department o States Bureau o Interna-

tional Inormation Programs, July 26, 2011, http://iipdigital.usembassy.gov/st/english/texttrans/2011/07/20110726191930su0.8481954.html#ixzz1UYV5cYwt.

29. UK Slates Delays over New EU Kosova Chie, Balkan Insight, August 2, 2011, http://www.balka-ninsight.com/en/article/delays-to-Kosova-s-eu-chie-sends-wrong-signals.

30. Ibid.31. Ola Ihlau, Europes Achilles Heel: Historical EU Error to Blame or Kosova Strie, Spiegel, July 29,

2011, http://www.spiegel.de/international/europe/0,1518,777305,00.html.


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Policy Recommendations for Washington andBrusselsTe ollowing recommendations are oered to both Washington and Brussels in order to ensuregreater acceptance o the dialogue process by Serbia and Kosova and achieve a common transat-

lantic vision or, and approach to, the Western Balkans.

Grant the Belgrade-Prishtina dialogue greater and broader ocus: Tere is a sense in bothBelgrade and Prishtina that the talks are given insucient attention by the most senior levelso government in Brussels and that the dialogue ocuses on purely technical issues; this mayunnecessarily mire the talks by reducing enthusiasm and momentum. Te recent border dis-pute reveals the incendiary nature o even the most technical o issues between the parties. Tedispute also reveals Kosovas growing impatience with the process and its desire to tackle morepressing questions such as the ree movement o goods or border issues in order to shore up itssovereignty. Te EU and the United States should propose a more ar-reaching agenda in thebilateral dialogue to achieve more concrete political results. Belgrade is unlikely to withdraw

rom the dialogue as it seeks EU support or its membership bid; more concrete political resultswill also encourage Prishtina to remain engaged.

Include northern Kosova as a subject in the talks: TeBelgrade-Prishtina talks can becomea mechanism and a catalyst or gradually involving northern Kosova in the countrys institu-tions and integrating the northern municipalities. Tis will give Prishtina a sel-interested stakein maintaining the dialogue and reduce complaints that only Belgrade will benet rom theprocess. Te talks can promote the establishment o the rule o law in the region and convenelegitimate local elections. Additionally, the local administration in northern Kosova and vari-ous social services, including health and education, should be integrated within the new state.Both the United States and the EU must ocus on restoring Kosovas territorial integrity as adivided Kosova will remain a source o dispute between Belgrade and Prishtina and a ulcrum

o instability or years to come.

Develop Serbia-Kosova border demarcations: NAOs mandate includes controlling Kosovasborders, but the demarcation o the rontier with Serbia is a political issue that can be pursuedin the bilateral talks. Te lack o negotiations on this issue is likely to continue to provoke inci-dents such as the July and September border disputes in northern Kosova. Neither KFOR northe Serbian military are authorized to demarcate borders, while NAO estimates that there isextensive tracking o smuggled goods through the northern portion o the border. Te Koso-va police have started to assume responsibility or border protection rom KFOR along therontier with Albania and Macedonia, but KFOR continues to monitor the police. KFOR tookresponsibility or the northern Kosova borders as well until September as part o the agreement

that resolved the July border conict. Although EULEX and Kosova customs ocials took con-trol o the border crossings in mid-September, KFOR is still providing security in the rontierzone. Tere is some urgency in dealing with border delineations as integrated border manage-ment and security are conditions that Kosova has to meet in order to be included in the processo EU visa liberalization.

Organize cross-border civil society networks: As a long-term parallel track o the negotiationprocess, the development o civil society networks will outlast any government in either Bel-grade or Prishtina. Tis would require the involvement o NGOs working in various domains,


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rom human rights to environmental protection. Furthermore, there needs to be a ocus onattracting businesses and developing a middle class throughout Kosova, including its north-ern municipalities. Serbs will then obtain a stake in developing commerce with the Albanianmajority; this will also moderate the impulses o local nationalism. A program that will grantbusiness loans in the region will help promote such a process.

Pursue a concerted campaign to expand Kosovas international recognitions, beginningwith the last remaining EU member states: Tis approach must concentrate in particular onthe ve EU non-recognizers (Greece, Spain, Romania, Slovakia, and Cyprus). Otherwise, thesestates could block some o the outcomes o the Serb-Kosovar dialogue or disable the EU romspeaking with a single voice and supporting the decisions o the chie mediator. A more uniedEU will also send a strong signal to Russia, and the UN could encourage other countries torecognize Kosova.

Include Kosova in EU visa liberalization: With all o the other Western Balkan countries hav-ing been granted visa liberalization to enter the EU, the exclusion o Kosova is creating a blackhole in the middle o the region by raising public rustration and encouraging criminal opera-tors to circumvent EU rulings.

Transition rom Kosovas supervision to the countrys development: Statehood and inde-pendence cannot be seen as a ormality without substance. Paradoxically, it is EU supervisionand the U.S. patron-like relationship with Prishtina that may be holding back the country romachieving its potential. Supervision creates dependency relations, places the ocus on managingproblems rather than on ostering development, limits political competition and democratictransparency as the government eels more accountable to outside powers than its own citizens,and undermines domestic responsibility or policy implementation. It also buttresses chargesby local nationalists that the United States is establishing puppet governments and colonies inthe region and that the EU does not see Kosova as a candidate or uture integration, but as asecond-class citizen. Te United States must not be seen as the protectorate power in a patron-

client relationship with Prishtina as this will undermine indigenous democratic developmentand gradually raise resentment against Washington.

Establish a direct relationship between Kosova and Brussels: Plans should be made to endthe EULEX supervisory mission, which both government and opposition leaders consider ine-ective in ullling its mandate to help establish the rule o law and good governance through-out the country. Instead, there needs to be a transition to a relationship between Prishtina andBrussels with specic agreements, conditions, roadmaps, and ocused EU assistance, as hasbeen the case in all other post-Communist states in Central and Eastern Europe. It is time totransition rom the EULEX Kosova Mission to a robust and senior EUSR with strong engage-ment and interaction with the U.S. Embassy in Prishtina.

Ofer Kosova an EU SAA and a roadmap to candidacy status: Te EU needs to strengthen itsrole in Kosova and the United States needs to better balance its relationship with Prishtina andstrengthen its relationship with Belgrade. Ultimately, without a concrete prospect or EU acces-sion or each country in the West Balkans, however long the process takes (and it is recognizedthat accession will take a very long time), the region is more likely to witness a series o internaland interstate conicts that may not replicate the war in the 1990s, but will seriously debilitatedemocratic progress, state-building, and economic development. It will also preoccupy the EU,the United States, and NAO in costly and time- consuming conict prevention and crisis-


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management missions or the next decade. Kosova in particular needs an EU entry strategystarting with preparations or an SAA that would be on track toward candidacy status. Tiswould incentivize conditions or domestic reorm and provide the EU with greater inuence inKosova.

I there arent more resolute and clearly delineated goals by key international players, the pros-

pects or instability will accelerate in Kosova in the midst o creeping economic distress and socialturmoil. Moreover, the opportunities or external actors to negatively inuence domestic devel-opments will also increase, whether these are neighboring nationalists or non-regional powers.Serbias EU candidacy without commensurate progress by Kosova could also create new obstaclesor Prishtina by emboldening Belgrade to be more obstructive in uture negotiations. For the rsttime in its history, the entire Balkan peninsula has the opportunity to coexist under one securityand economic umbrella. Unortunately, the policies o European and American leaders are cur-rently inadequate to the task o ullling such a unique historic vision. A new impetus is needed todrive policy toward achievable objectives.


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|15

Te yearlong political gridlock over the ormation o a new state government in Bosnia- Herce-govina illustrates the risk o policy stagnation and potential regional instability in the WesternBalkans. Te second part o this report provides a detailed analysis o the challenges acing thestalled 16-year state-building project, underscores the structural aws o the Dayton Peace Ac-cords to developing durable governing structures, and oers some innovative recommendationsto orm the basis o a resh transatlantic approach or moving beyond the protracted stalemate andreocusing on reorms.

Tis report assesses the actors precluding the building o an integral and eective state inBosnia-Hercegovina, including the disputes between the three major ethno-national groups, andexplores points o transatlantic contention, with a special ocus on international assistance andintegration, the evolving role o the Oce o the High Representative (OHR), and paths or politi-cal and economic development. Based on this analysis, the report outlines the best and worst casescenarios or the uture o Bosnia based on a variety o policy decisions.

Te ollowing recommendations are oered to both Washington and Brussels; the aim is toadvance the construction o a more ecient and integrated state o Bosnia-Hercegovina:

Develop new peace accords that strengthen the state and redene the international presencein Bosnia-Hercegovina, specically the OHR. Te agreement should limit the applicability oentity vetoes that prevent reorm and block state institutions.

Negotiate a new international structure in which the EU is in charge o state and regionalpolitical and economic development and the United States is responsible or security sectorreorm and NAO-led eorts. Ensure that international aid is perormance-based by rewardingcentralized projects and initiatives and sanctioning moves toward partition.

Promote the economic benets o greater European integration through an outreach programwith the Bosnian public, mass media, and NGOs. Well-inormed citizens can exert pressure ontheir leaders to implement reorms in support o integration.

Proactively deter and prevent conictby placing a small EU monitoring mission in the Brcko

district, a vital choke point between the two entities. Promote regional dialogue, specically a new trilateral dialogue with Serbia and Croatia, which

oers consultation and mutual support or the development o a single, unctional Bosnianstate.

Tese recommendations or a more eective and integrated state-building project in Bosnia-Hercegovina can orm the oundation o a resh, ecient, coordinated, and long-term transatlanticapproach toward greater integration with the transatlantic community.

executive summarybosnia-hercegovina


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16 |

SummaryTe 16-year state-building project in Bosnia-Hercegovina has stalled and the country has enteredan era o increasing uncertainty and will ace continuing threats to its stability and territorialintegrity. Te presumption by leaders o both the European Union and the United States that thecontinuous reduction o international supervision and the magnetic attraction o EU integrationwould convince Bosnias political leaders to pursue the rigorous reorms necessary or EU acces-

sion has proven to be illusory. I anything, the opposite has been the case. Bosnia has stymied,then regressed, as a unctioning state and is increasingly driven by disputes between leaders o thethree major ethno-national groups. Te stability and survival o the state is now called into ques-tion. It is time to move Bosnia-Hercegovina up the oreign policy priority list or both the EU andthe United States and to develop a clear transatlantic action plan and synchronized message orBosnia; i not, the country aces years o drif and division that could culminate in destructive newconicts that would impact negatively on the wider Balkan region.

Bosnias Challenged Statehood

Daytons Shortcomings

Signed under international supervision in November 1995, the Dayton Accords were instrumentalin terminating armed conict and constructing an administrative structure that would give thethree national communities a stake in remaining in a single country through a protective veto overdecision making. Te accords were never designed to build an integral and eective state in whichthe central government in Sarajevo possessed decisive authority. Rather, they created a complexadministrative structure in which priority was given to ethnic balancing with accompanied layerso governmental bureaucracy. Tis contributed to ineciency and budgetary burdens. Te ac-cords have obstructed eective decision making and guaranteed that ethno-national interests havelargely predominated over civil-state interests. According to ormer U.S. diplomat William Stueb-ner, the Dayton agreement legitimized and enshrined ethnic politics, something that violated our

most sacred principles and something that we in the United States would never accept in our ownsystem.1

Lacking the ability to develop an alternative construct, the principles and spirit o Daytonwere maintained and managed by the authority and intervention o major international institu-tions mandated to oversee the Dayton process through the Peace Implementation Council (PIC)

1. Wests Indierence Could Condemn Bosnia Anew, Reuters, August 14, 2011, http://www.reuters.com/article/2011/08/11/us-bosnia-stuebner-idUSRE77A1KD20110811.

bosnia-hercegovinasalternative-futures2


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Steering Board, whose members include Canada, France, Germany, Italy, Japan, Russia, the UnitedKingdom, the United States, the rotating Presidency o the Council o the European Union, theEuropean Commission, and the Organization o the Islamic Conerence (OIC), represented byurkey. Te international communitys primary instrument or instituting reorms and maintain-ing the unity o the state has been through the OHR.

When the OHR has used its international weight to push through reorms, Bosnia was ableto point to some consolidation o its statehood; when the OHR led rom behind and urged dia-logue and compromise between ethno-national leaders, Bosnia achieved little progress. For overa decade, the international community has ailed to answer this conundrum: is it preerable toimpose an eective state that can make progress toward EU and NAO membership, or is it moreempowering and democratic to permit local leaders to obstruct the process and pursue essentiallyseparate ethno-national agendas?

A prominent OHR role has provoked charges o international intererence, dependency, andantidemocratic means. A minimal OHR role has emboldened Bosnian leaders to conclude thatcertain rules in pursuit o statehood will not apply. As the debate has raged, Bosnia has allen ur-ther behind in the reorm process. Key policy makers in the United States and the EU have exacer-bated this dynamic by not aligning their policies and messages on the best approach. Former U.S.deputy assistant secretary or European and Eurasian aairs Tomas Countryman lamented that,despite the desire to concentrate on political development on a path towards the EU, the UnitedStates and the international community still need to protect the basic principles o Dayton.2 Incontrast, European leaders, such as Gerald Knaus o the European Stability Initiative, have arguedthat the OHR should have been closed in 2004 and replaced with a clear roadmap and concretegoals to reorm the country and attain EU-accession. Knaus claims that the EU was serious and o-ered a demanding and concrete road map.3 How serious and implementable such a road map hasbecome, is a subject o internal debate in Sarajevo.

Integralism and DivisionBosnias major nationalist parties, such as the Party or Democratic Action, the Serbian Democrat-ic Party (SDP), and the Croatian Democratic Union (HDZ), prioritize preserving their interestsover supporting an integral country that can eventually join the EU. Tis is exemplied by the on-going obstruction over the ormation o a new state government ollowing the October 2010 gen-eral elections. Although the state-level parliament and a caretaker government continue to unc-tion to a limited extent, the key Serbian and Croatian national parties block the choice o primeminister by the election winners, the multiethnic SDP. Te HDZ objects that its candidate has notbeen selected, although a non-HDZ Croat, Slavo Kukic, had been nominated as prime minister bythe SDP. Negotiations between the current ruling coalition and the opposition parties to break the

yearlong political gridlock may result in the appointment o ormer ederation president BorjanaKristo, proposed by the two major Croat parties.4

2. US Diplomat: Bosnia Lagging Behind in Balkans, Balkan Insight, August 9, 2011, http://www.balka-ninsight.com/en/article/us-diplomat-bosnia-lagging-behind-in-balkans.

3. Matthew Brunwasser, Bosnia Flounders as Powers Argue, New York Times, June 27, 2011, http://www.nytimes.com/2011/06/28/world/europe/28iht-bosnia28.html?pagewanted=all.

4. Bosnia Edges Closer to State Government Deal, Balkan Insight, July 28, 2011, http://www.balkanin-sight.com/en/article/bosnian-leaders-closer-to-agreement.


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President Milorad Dodik in the RS entity has been the most resistant in orming a central gov-ernment. Dodik claims that because the state is not a unctioning entity, the RS needs to developits sovereignty. He has opposed the state government on the grounds that it abrogates powers thatbelong to the national entities; he also believes that the state government engages in a policy ocentralization and Bosniak Muslim domination. Dodik is reclaiming as much autonomy or theRS as possible and asserts that, when it is nally ormed, the state government should only dealwith oreign and security policy matters. President Dodik has politically beneted rom provokingconrontation with Sarajevo and courting direct talks with the EU. Tis was the case in May 2011when EU high representative Ashton appealed directly to Dodik to suspend a planned RS reeren-dum on the State Court. Te visit o Ashton to Banja Luka raised Dodiks stature as a senior states-man and leader o an aspiring state. He has continued to dangle the specter o reerenda on suchissues as OHR legitimacy, state property, and judicial reorm, and, potentially, on RSs separation.He remains patient and opportunistic, tests international resolve, backs down rom controversialmeasures when there is a rm international response, but pushes ahead when the reaction is tepid.

Entity Blocking

Te government o the Federation o Bosnia-Hercegovina (the joint Bosnian Muslim and Croatentity) was constituted in March 2011, but has not yet been recognized as legitimate by the RSNational Assembly or by the major Croatian parties, the HDZ and the HDZ 1990. Te latter twoobject to the act that they were not included in the Federation government, although other Bos-nian Croats are represented in the administration. HDZ and HDZ 1990, who claimed almost 80percent o the Croatian vote, have asserted their political monopoly by claiming that only the twooremost national parties can nominate genuine Croat representatives and have demanded thatall ve ministries be assigned to Croatian delegates. Non-HDZ Bosnian Croat politicians, electedpartly by non-Croats, are not considered by the nationalists as authentic ethnic representatives. Bycontrast, the civic-ocused SDP argues that any lawully elected Croat, regardless o who voted or

them, can represent Bosnian Croats. Some Croat leaders in the HDZ as well as in the RS govern-ment have voiced support or the creation o a third entity, a Croatian majority unit, to be carvedout o the Federation, although not the RS. Such a scenario would result in the establishment o aBosniak Muslim entity and enable the RS and a potential Herceg-Bosnia entity to more eectivelyobstruct the state government in Sarajevo. Te RS leadership is very supportive o such restructur-ing and is increasingly coordinating its approach with the HDZ to deend the politics o ethnicblocks and nationally based economic interest groups.

Although the RS is also supposed to be a multiethnic entity where no major governmentaldecisions can be taken without representatives rom all three nations agreeing, in practice the Ser-bian parties remain dominant and the RS president makes all essential decisions without consulta-tion with Bosniak or Croat representatives. Indeed, there is evidence that the RS is evolving into a

one-party quasi state. In stark contrast, decision making in the Federation requires the consent orepresentatives o all three national groups.

Due to the increasingly political complexity and ethnic party racturing, attempts at constitu-tional reorm have been obstructed. For instance, the April 2006 package o constitutional reormproposed by international mediators was ultimately rejected by a coalition o Bosniak and Croatdeputies based on ears that they would cement territorial and institutional divisions in Bosniaalong ethnic lines while also allowing the RS entity to control the ate o Bosnia and its central


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institutions.5 A renewed U.S. and EU eort (led by Swedens oreign minister and the U.S. deputysecretary o state) or constitutional reorm in October 2009, known as the Butmir Process, alsoailed to bring results despite the unied eort by the United States and the EU. Underlying politi-cal divisions within the country, coupled with an unrealistic, high-prole eort, dicult timeconstraints and a take it or leave it approach, doomed the chances o the Butmir Process suc-ceeding in an environment lled with nationalist rhetoric and altering international credibility.6Entity leaders continue to block the ormation o the central government twelve months afer theOctober 2010 elections.

Points of Transatlantic Contention

OHR or No OHR? That Is the Question

A central issue in Bosnian politics and transatlantic discussions is the debate regarding the role othe Oce o the High Representative (OHR). On one side are those avoring international pres-sure and strong-armed tactics on local leaders via the OHR, while on the other are those who

believe that nothing durable will be achieved unless local leaders buy into the process withoutinternational intererence.

Tere are justiable reasons or concern regarding the evolving role o the OHR. Since 2002,the high representative has also served as the EU Special Representative (EUSR) to Bosnia. All othe high representatives have been rom EU countries, while their principal deputies have beenAmericans. NAO orces were replaced in December 2004 by a much smaller and weaker EUcontingent. Additionally, the OHR was emasculated afer 2006 and the Bonn Powers were largelydiscarded as a result o Bosnian political pressures and the growing sentiment that these powerswere undemocratic, dictatorial, and that they undermine EU credibility in the region.7 Te highrepresentative or BiH Schwarz-Schilling (20062007) decided to avoid using the sweeping powerswhich his predecessors, especially Paddy Ashdown, relied on to push through legislation and sack

hundreds o elected ocials. Te requent use o these powers was ofen criticized by local andinternational ocials. However, recent high representatives Miroslav Lajk (20072009) and Val-entin Inzko (since 2009) have resumed greater use o the Bonn Powers in replacing police ocialsand repealing laws.

Tere are growing ears that i the OHR was replaced completely by an EU delegation (per-ceived as a much weaker presence), the EU would remove the American presence altogether.Within Bosnia, the OHR is seen by Bosniaks as a critical saeguard o the survival o their entityand o a unied Bosnia; it also guarantees a continued U.S. presence in Bosnia. Tose who avor astrong OHR and an American presence in Bosnia ear that the disappearance o the OHR wouldencourage Bosnias political and territorial dismemberment. Bosnian politicians are aware o the

act that U.S. presence in the region is declining and its leverage has decreased, while the EU is

5. Te Complexities and the Necessities behind Constitutional Reorm in Bosnia and Hercegovina:Position Paper, Bosniak American Advisory Council or Bosnia and Hercegovina, Washington, D.C., Octo-ber 25, 2006.

6. Soa Sebastian, Breaking the Impasse: Constitutional Reorm in Bosnia, FRIDE: A European Tinkank or Global Action, Policy Brie, no. 69, March 2001.

7. Bart Szewczyk, Te EU in Bosnia and Hercegovina: Powers, Decisions and Legitimacy, EuropeanUnion Institute or Security Studies, Occasional Paper 83, March 2010, http://www.iss.europa.eu/uploads/media/OccasionalPaper83.pd.


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synonymous or slow motion, leaderless bureaucracy, and member-state policy divisions withoutU.S. leadership and engagement, thus emboldening those seeking greater decentralization or out-right separation.

On the other hand, those who discount an international mediating role by outside powers,specically Bosnian Croats, contend that once the OHR has been removed, Bosnia will move more

smoothly toward a conederal arrangement or a nal territorial division. RS president Dodik ap-pears to want it both ways: he seeks to leverage the EU to neutralize the OHR and the U.S. pres-ence in BiH. Yet he also needs the OHR as an enemy so that he can claim he is deending Serbianinterests against unwarranted international intererence. His evident preerence would be or aweak and temporary OHR beore he makes a nal decision on separation.

Outside powers are equally conicted about the role o the OHR. Afer the September 11 at-tacks and Washingtons preoccupation with military operations in Iraq and Aghanistan, there wasa prevailing assumption that the United States would gradually withdraw rom Bosnia and leavethe country to EU supervision en route to integration. According to ormer Pentagon ocial Wil-liam Stuebner, the United States doesnt care anymore, the whole attitude is that its a Europeanproblem and Europeans should handle it.8 Although the United States has remained engaged inBosnia, its activities have waxed and waned over the last several years, primarily due to individualswith historical involvement with the Dayton Accords. Washington seeks to preserve the OHR andallow or greater political intervention in cases where the principles o Dayton are undermined byBosnias leaders.

Several EU countries, such as France and Spain, would like to see the OHR closed. Te EU isdrafing plans or the European External Action Service (EEAS) to take over the OHRs mandate.Other countries, namely the United States, the United Kingdom, and urkey, are concerned thatBosnian leaders are not ready to govern on their own and ear that a premature closure wouldcompromise security in the region.9 Implicit in this decision is the act that without the OHR, theUnited States cannot legally operate in Bosnia. Baroness Ashton announced in July 2010 plans or

the EU to take over the leading international role in Bosnia by taking the mandate and unctionso the OHR into the new EEAS, but she has ailed to ollow through on those commitments soar.10

Te Russian government is widely perceived to be supportive o RS president Dodik and isencouraging Banja Luka to undermine the authority o the OHR and to promote an Americanwithdrawal. Moscow seeks to expand its inuence throughout the Balkans by utilizing (some mayargue manipulating) economic contracts, energy dependence, and political corruption, as wellas by blocking Western initiatives. Tere have been some policy successes in the RS, particularlywhen encouraging the prospect o secession. Russia seeks to maintain Bosnia as a rozen conictor paralyzed state that will create headaches both or Washington and Brussels and use it as lever-age in its broader diplomatic rivalry with the West.

urkey has become more active economically and diplomatically in the Western Balkans ingeneral, and more specically in Bosnia. urkey is aligned with the United States against the EU in

8. Wests Indierence Could Condemn Bosnia Anew.9. Kenneth Morrison, Bosnias Challenging Year Ahead, Guardian, February 14, 2010, http://www.

guardian.co.uk/commentisree/2010/eb/14/bosnia-election-doubts-unctional.10. Baroness Ashton Moves to ake Control o Bosnia, Telegraph, July 27, 2010, http://www.telegraph.

co.uk/news/worldnews/europe/bosnia/7912675/Baroness-Ashton-moves-to-take-control-o-Bosnia.html.


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arguing that it is not yet time or the OHR to be closed. An unnamed urkish diplomat has stated:We are not categorically against the closure o the OHR, but we still have to wait or conditions tomature.11 urkey did not block the 2007 decision to close the OHR, but did note its reservationsto closure by arguing that the decision had to be based on the conditions in the country as wellas in the region. urkey recognizes that the OHR must be closed to advance Bosnias EU ascen-sion process, which will provide a ast track to normalization o the country. However, it believesthe risks are too high at this stage. Te EUSR will have less authority than the OHR, arguedthe urkish diplomat, while expressing concerns that this would be a disastrous situation shouldviolence erupt once again in the region.12 As a ellow member o the PIC, urkey has aligned itselclosely with the United States on this point.

Single State or RS Separation

RS president Dodik has pushed or increased autonomy and sovereignty or the Serbian entity.Ocially, he claims that he does not seek RSs secession but simply seeks to return to RS manyo the governing prerogatives seized by Sarajevo in recent years. Dodiks vision is a conedera-

tion between two or three substate entities with a weak central government. He has also indicatedthat Montenegros reerendum on independence in May 2006 may serve as a template or the RS.Although Dodik began as an antinationalist, he has adopted a more ethnocentric approach insupport o RS separation. Some analysts believe that Dodik sees himsel as the unier o Serbianlands and has ambitions to preside over a joint state with Serbia rather than or the RS to be simplyabsorbed by Belgrade, which would make him a much reduced political player.

In justiying its opposition to state institutions, Banja Luka complains that the state govern-ment in Sarajevo is mismanaged, inated, wasteul, and riddled with corruption. RS leaders alsoassert that over 90 percent o their population avor separation and statehood. Bosniak leaderscharge that the RS has become more autocratic and centralized, and that Bosniaks and Croats areexcluded rom decision making. RS appears to work more eectively as a state than the Bosnian-

Croat Federation as it has a more streamlined structure without cantonal administrations wherethe major Serbian party predominates.

Some Croatian activists, angered by HDZ and HDZ 1990 exclusion rom the ederal govern-ment, have ocused on creating a regional inter-cantonal structure in the Federation, styled as theCroatian National Assembly (CNA), consisting o 20 percent o Bosnian territory and based inMostar. Te CNA seeks to coordinate municipal and cantonal administrations in which Croatsorm majorities, which some o its leaders have demanded or the ormation o a third Bosnianentity. Teir moves are openly supported by Banja Luka.

Ethnic or Civic Politics

Ethno-nationalist politics has dominated Bosnian governance since the end o the 1992-95 warand has stymied the development o state citizenship, programmatic pluralism, individual rights,and a competitive democracy. Tey are treated as equivalent to ethnic collectivities by interna-

11. Barcin Yinac, urkey, US ake on EU or Bosnia, Hurriyet Daily News, December 2009, http://www.hurriyet.com.tr/english/domestic/12009542.asp.

12. Ibid.


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tional actors, and are primarily based on patronage and clientelist networks. Teir leadership isadamant that civic politics cannot be applied in Bosnia: only a system o inter-group balance.

In October 2010, or the rst time in 15 years, a civic-based party, the SDP, won the nationalelections. Tis indicated a growing constituency or a non-ethnic vote, undermining the ethnicparty stranglehold on political institutions. RS and HDZ leaders suspect that the civic project is

primarily a cover or pursuing centralization, promoting Bosniak domination, and ensuring theminoritization o the Serb and Croat populations. Some analysts contend that the SDPs ocus oncivic identity is provoking Serb and Croat nationalist leaders to push or separation. Paradoxically,the more successul the civic project becomes, the more it contradicts the principles o Dayton,particularly the legitimacy o ethnic balancing and entity blocking, and it can precipitate nationalconicts.

No real pan-Bosnian identity has yet emerged since the war and no practical unicationprojects, such as inrastructure construction, educational reorm, or common youth movements,have been pursued that would help bind the three nations together in a single state. Bosnian stateidentity remains shallow and articial. Te younger generation has no tradition o multiethnicYugoslavism and little knowledge o, or interaction with, other ethno-national groups. Serbs romBanja Luka are more likely to visit Belgrade or Zagreb than Sarajevo. Te educational systems areseparated and there is no common lie between the two entities. Tis leaves young people suscep-tible to indoctrination and political manipulation.

While rhetorically supportive o multiethnicity, the EU has been critical o the multiethnicSDP since the October 2010 elections, claiming that it could destabilize the inter-ethnic or inter-nationalist political arrangements and prove to be troublesome or EU monitoring. Te EU wantsto maintain the status quo and uphold relative political stability in Bosnia, even i this disablesprogress on the reorms necessary to enter the EU (or perhaps politically, this is a desirable out-come).

Following repeated and ailed attempts by the United States and the EU to resolve the ethnicand political stalemate, urkey attempted to directly broker an agreement on its own in Januaryand April 2011.13 It has held separate meetings with Bosnian leaders without EU or U.S. ocialspresent to assist the ormation o a new government. urkish oreign minister Ahmet Davutogluhas told local politicians that his country is ready to help the various communities overcome thedierences that are preventing them rom orming a government ollowing the elections.14 He hasalso proposed Ankaras willingness to pursue, together with key European and American partners,eorts aimed at a constitutional amendment and the ormation o a new Bosnian government.15However, the countrys involvement has been criticized as neo-Ottomanism by the RS as Dodikbenets politically rom a weak central government.

13. Athina esa-Yohannes, Te Stability o Bosnia-Hercegovina and urkeys Role, BILGESAM, July14, 2011, http://www.bilgesam.org/en/index.php?option=com_content&view=article&id=368:the-stability-o-bosnia-Hercegovina-and-turkeys-role&catid=95:analizler-balkanlar&Itemid=140.

14. Anes Alic, As Predicted, urkey Steps in to Help Bosnia Form New Govt, While Spreads Disin-ormation on Flag Row, ISA Intel, January 31, 2011, http://www.isaintel.com/2011/01/31/as-predicted-turkey-steps-in-to-help-bosnia-orm-new-govt-while-spreads-disinormation-on-%E2%80%98ag-row%E2%80%99/.

15. op urkish Diplomat Visits Sarajevo, Cumhuriyet, January 29, 2011, http://en.cumhuriyet.com/?hn=212370.


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Secularism or Islamism

Radical Islamist inuence in Bosnia is not a mainstream phenomenon as the overwhelming ma-jority o Bosniak Muslims belong to the moderate Hana branch o Sunni Islam. Te notion o anIslamic Bosniak state does not attract many young people; it is estimated that less than 10 percento the Bosniak population avor partition and the creation o a Muslim Bosniak republic. Te

growth o Islamist inuence or Muslim nationalism is more likely i the country starts to splinteror i prolonged political stagnation occurs. Islamists inuence would likely be a response to Ser-bian and Croatian separatism, thus intensiying the struggle within the Islamic community overthe uture o a smaller Bosniak state.

RS leaders claim that Wahhabism is growing among Bosniaks and endangers Serbian nationalinterests. Used as a propaganda ploy (as Salasm or Wahhabism, the more conservative brancheso Islam,are a minority belie in Bosnia), the major external Muslim inuences emanate rom ur-key and other moderate Islamic states. Although urkey has increased its economic and culturalinvolvement, it does not exert a decisive role in Bosnian politics despite Ankaras aspirations toproject greater inuence in the Balkans. Nonetheless, urkeys inuence in the region balances and

modulates Sala inuences among Muslim populations in the region.

Reform or Stagnation

Economic conditions have been stagnant in Bosnia or several years. Afer a 3 percent drop in thegross domestic product (GDP) in 2009, Bosnia is only now starting to grow at a eeble rate o 2.2percent, while unemployment remains at a staggering 43 percent.16 Bosnias budget bears a heavyburden rom the conict and an enormous state sector inherited rom Dayton. Although the veadministrative levels (city, municipal, cantonal, entity, and state) and the Brcko district govern-ment provide thousands o civil service jobs, they also inhibit state investment in productive busi-nesses. Tere are plans to trim the state sector and lower the budget decit rom 2.5 to 1.4 percent

o the GDP, but this will depend on an entity agreement which has been elusive so ar.17

Althoughseveral cantons are nancially unsustainable, the HDZ claims minoritization i their budgets arecurtailed; or i the cantons are merged, eliminated, or i the Federation government is strength-ened at the expense o the cantons, as some politicians in Sarajevo have proposed.

One major actor encouraging partition has been the ongoing division o state property,including land and utilities, and the legalization o its ownership by the two entities. o close theOHR, the PIC requires that there be a determination o a state property law that is accepted by theRS, the Federation o BiH, and Brcko. However, this goal has been complicated by a September2010 Law on State Property passed by the RS, which will secure and protect all orms o propertywithin its territory. Te law includes a provision that allows an entity government to use stateproperty without compensation and gives some property to municipalities. Serb and Bosniak par-

liament members have opposing opinions on this matter, with the Serbs supporting this law andBosniaks arguing that it is in violation o the BiH Constitution and the Dayton Peace Accords. TePIC has called the law a unilateral act that undermines the long-standing attempts to divide the

16. Bosnia and Hercegovina Economy Prole 2011, Index Mundi, http://www.indexmundi.com/bos-nia_and_Hercegovina/economy_prole.html.

17. Bosnia Region Boosts Budget, Decit Unchanged, Tomson Reuters, June 29, 2011, http://www.orexyard.com/en/news/Bosnia-region-boosts-budget-decit-unchanged-2011-06-28125934Z-INER-VIEW.


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state property so as to enable all levels o government to unction.18 Subsequently, High Repre-sentative Valerie Inzko decided to suspend the laws implementation until its legality is reviewedby the Bosnian constitutional court. Upon suspending the law in January 2011, he stated that theaction was taken to ensure that the situation on the ground will not be complicated by imple-mentation o the law until its legality is reviewed by Bosnias constitutional court.19

Bosnias state structures are largely dependent on outside unds. Te extended absence o astate government creates problems in releasing EU unds and tranches o International MonetaryFunds (IMF) loans, while also curtailing prospects or oreign investment. Both the United Statesand the EU have provided extensive aid to the country in recent years. In 2011, Bosnia is projectedto receive 108.1 million ($160.5 million) in EU aid under the Instrument or Pre-Accession Assis-tance (IPA). Tis aid under IPA is expected to increase to 110.2 million ($165 million) in 2012.20In comparison, the U.S. Agency or International Development (USAID) has spent nearly $1.5 bil-lion in BiH since 1994. In FY2010 Bosnia received $42.84 million in U.S. aid. USAID is projectedto maintain this level or FY2011 and the Obama administrations FY2012 oreign aid requestincludes $50.25 million in aid to Bosnia.21

Some observers believe that nancial restraints in the RS will convince President Dodik toallow or the creation o a state government in order to ll growing gaps in the RS budget rom EUand IMF sources. However, Dodik has also been courting alternative unding rom Russia, Serbia,and China, as well as attracting oreign investors. While it is too soon to determine whether thesesources o income can reach or surpass aid previously supplied by the EU or IMF, some o thedeals already struck have been impressive. Among the recent privatization deals, the state telecom-munications company in neighboring Serbia has agreed to buy a majority stake in the RS telecomor 646 million, and the Russian oil company OAO Zarubezhnef bought stakes in the entitys oilrenery, a lubricant producer, and a uel retailer or 121.2 million.22

United States and NATO Assistance

As just discussed, the U.S. government, primarily through USAID, has been actively involved ineorts to reorm Bosnia. Te agency is promoting a three-pronged approach which ocuses onpromoting economic growth, peace and security, and democratization.23

Te agency seeks to improve economic growth in the country by increasing competitive-ness in Bosnias high-growth sectorssuch as wood processing, tourism, and agriculturewhilealso pushing or economic reorms that strengthen nancial institutions and reduce barriers orbusinesses. o advance these economic aims, unds have been allocated to a number o projects,

18. Ljiljana Smiljanic, RS Lawmakers Adopt Controversial State Property Law, SETIMES,September16, 2010, http://www.setimes.com/cocoon/setimes/xhtml/en_GB/eatures/setimes/eatures/2010/09/16/

eature-01.19. Bosnia: Row over Controversial Property Law Continues, Balkan Insight, January 11, 2011, http://www.balkaninsight.com/en/article/bosnia-row-over-controversial-property-law-continues.

20. Steven Woehrel, Bosnia: Current Issues and U.S. Policy, Congressional Research Service, June2011, http://www.as.org/sgp/crs/row/R40479.pd.

21. Ibid.22. Beth Kampschror, Bosnian erritory Opens Doors or Business, Wall Street Journal, May 15, 2007,

http://online.wsj.com/article/SB117918783695002652.html?mod=googlenews_wsj.23. Bosnia-Hercegovina, USAID Program Overview, http://www.usaid.gov/ba/ourwork/programarea.

htm.


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including $21 million to increase competitiveness o the wood-processing, tourism, and lightmanuacturing industries; $14 million to assist agricultural associations; and $8.1 million in as-sistance to the nancial services sector to improve private sector growth.24

o promote democratization, USAID has ocused on improving the rule o law, local gover-nance, and civil society. Eorts include a $30 million allocation o unds toward a Governance

Accountability Project which helps local governments enhance their management systems andimprove customer service. Additionally, there have been projects dedicated to strengthening civicengagement in constitutional reorm and anti-corruption eorts as well as projects to reorm thejudiciary.

o improve peace and security in Bosnia, USAID has ocused on promoting tolerance andrespect or diversity. Specically, $855,000 has been allocated to combat human tracking byproviding prevention education in secondary schools and to assist with reintegration o victims otracking.25

NAO has

111110 bugajski transatlantic approach web

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