Bosnia’s Presidential Dispute Jeopardizes Aid to Rebuild

More than two months after national elections meant to bring Bosnia together, the country’s three presidents remain locked in bitter dispute over the formation of a joint government.

The delay could cost the country millions of dollars in desperately needed reconstruction aid and is paralyzing efforts to restore a normal way of life to a war-traumatized society.

Hoping to force a compromise, international mediators negotiated throughout the weekend and Monday with Bosnian Serb, Muslim and Croat leaders, but no agreement was reached, officials involved in the talks said Monday afternoon.

The presidents have already broken repeated pledges to form a government by now, and next week they face a new deadline set by the crucial London conference, a panel that will determine the scope of the international commitment to Bosnia-Herzegovina next year.

At the heart of the dispute are conflicting visions of postwar Bosnia: The Serbs want a weak central government to ensure greater power and sovereignty for their half of the country, mediators said, while the Muslims want a more formidable central government to enhance their control of the country’s affairs.

Many of the loan programs going to Bosnian reconstruction have been suspended because of the delay. From the World Bank alone, about $25 million in new loans is frozen, said Rory O’Sullivan, head of the bank’s Bosnia office, which is overseeing the disbursement of $350 million this year.

“We are not in a position to sign loans with a government that doesn’t exist,” O’Sullivan said. “If [the impasse] goes on, it will be very expensive. It could freeze the entire reconstruction program.”

In addition, some money from the European Union, the biggest contributor to Bosnian reconstruction, has also been held up because of the government void.

Carl Bildt, the former Swedish prime minister who is in charge of executing the U.S.-brokered peace agreement that ended Bosnia’s war a year ago, has appealed to the feuding presidents to agree on a government. He said the paralysis threatens refugee repatriation and all other social and economic recovery from a war that claimed tens of thousands of lives and displaced an estimated 2 million people.

“People aren’t getting a peace dividend,” a Western official said. “The [peace] process is not making a return to war impossible in the eyes of the people here.”

Elections on Sept. 14 gave each of the two halves of Bosnia--the Muslim-Croat Federation and the Bosnian Serbs’ Republika Srpska--its own government as well as a set of nationwide umbrella institutions, including a three-person presidency made up of a Muslim, a Serb and a Croat.

The members of the collective presidency, who had to be cajoled into even sitting together in the same room, were supposed to appoint a Council of Ministers numbering at least three. The council--the Serbs refused to allow it to be called a government--would have powers limited to foreign affairs, foreign trade and similar portfolios.

The Serbian member of the presidency, Momcilo Krajisnik, has insisted that the council consist of no more than three people, according to Western sources involved in the negotiations. That would further limit its authority and allow the Bosnian Serb leadership to disregard it as a meaningless institution, the sources said.

Alija Izetbegovic, the Muslim member of the presidency, has demanded a council with at least six members, more resembling a proper cabinet, the sources said.

Izetbegovic won the most votes in the September election, which entitled him to chairmanship of the presidency. So it is likely that the prime minister, who will head the council of ministers, will be a Serb. The name most often mentioned to fill the position of foreign minister is Jadranko Prlic, a Croat.

Each side accuses the other of blocking an agreement. Serbian leaders have told mediators that they want the joint institutions in order to restart loan programs. Thus far, only 2% of reconstruction aid has gone to the Bosnian Serb half of the country, deepening the economic crisis there.

According to the World Bank’s O’Sullivan, annual inflation is running as high as 65% in Republika Srpska and growth is at zero or worse, while the Muslim-Croat Federation has an inflation rate near zero and a growth rate of up to 50%. Wages, he said, are three times higher in the federation.

Bildt, who is said to be offering a compromise for the composition of the Council of Ministers, said last week that power-sharing--even among nationalist enemies--is the key to the future of Bosnia.

“If the joint institutions are not formed, the country will be partitioned, and that’s the tragedy,” Bildt said. “If [power-sharing] fails, in two years or in five years, peace and the unity of the country will be at risk.”