The Divide in Bosnia Is Now Economic as Well as Ethnic

On one side of Bosnia’s postwar divide, teenage survivors of the siege of this city skate through what was once a military bunker and is now a booming underground mall. Shoppers browse air-conditioned boutiques and sporting-goods stores, selecting beachwear for their first vacations in years. Some venture into the bigger showrooms, looking to replace cars and appliances destroyed by almost four years of ethnic slaughter.

On the other side, in the drab little ski resort of Pale just 10 miles away, the closest thing to a mall are rows of flimsy metal tables under sidewalk umbrellas. There, forlorn-looking women peddle gum, candy, cigarettes and cheap brandy to the few passersby who can afford them. “If I am not here working 12 hours a day, seven days a week, my children don’t eat,” said Mira Kujaca, who rarely brings home more than $3 a day.

The two markets illustrate an unsettling gap between Bosnia-Herzegovina’s postwar entities. While the Muslim-Croat Federation’s economy is rebounding with infusions of foreign aid, the ethnic Serb ministate, called Republika Srpska, is mired in the poverty of defiant self-isolation.

In 1996, the first year after the halt in fighting, the federation gained 200,000 jobs, mostly in reconstruction of housing and public works, cutting its 90% unemployment rate by nearly half, according to the World Bank. The recovery has helped trade more than industry, but some factories are reviving, and average wages have tripled to about $150 a month.

Republika Srpska, though less damaged by the war and better endowed with minerals and farmland, remains destitute. Eight in 10 there are jobless. The average monthly wage is $40 and never paid on time. Skilled workers leave, and investors shy away. Factories are idle, including dozens that were dismantled by the Serbs in wartime Sarajevo, trucked out and reassembled. There is simply no money to restart them.

“The Serbs registered a blip [of growth] early last year, but now their peace dividend is gone,” said Rory O’Sullivan, chief of the World Bank mission in Sarajevo, the Bosnian capital. “They have probably reached a point where they are worse off than they were at the end of the war.”

Dangerous Gap

Western diplomats and aid officials, struggling to make December 1995 peace accords work, say the economic gap is dangerous. It reinforces the Bosnian Serb leadership’s resentment of the outside world, they say, and feeds a perception by the Muslim-Croat Federation’s strengthening army that its old enemy is weak and vulnerable. “It breeds jealousy, mistrust and opportunism,” a senior aid official said. “And that can lead back to war.”

The accords signed at Dayton, Ohio, were supposed to unite Bosnia’s rival Serbian, Croatian and Muslim enclaves in a jointly run multiethnic state that would allow refugees to return to areas subjected to brutal “ethnic cleansing” during the war. International aid was supposed to pay for things such as railroads and bridges that join rather than divide.

While Muslims and Croats have resisted parts of the accord, the Serbs have refused to go along with any kind of re-integration. They resist reopening their airport, reconnecting telephone and mail service with the rest of the country or accepting a common Bosnian license plate for cars.

One notable agreement, a common currency, has yet to take effect because the Serbs insist on putting two-headed eagles and Orthodox monasteries--symbols of their nationalism--on the bills.

The Serbs are paying for their obstinacy.

Of $5 billion in international aid foreseen under the Dayton accords, up to $1.4 billion could have gone to their republic, which occupies 49% of Bosnia. Instead, the World Bank says, the Serbs have received less than 4% of the $1.1 billion distributed so far.

Individual foreign donors bypass the Serbs for refusing to let refugees go home or to hand over war crimes suspects--even though the Muslims and Croats have not fully complied with those peace terms either.

But the Serbs also hurt themselves with mundane forms of isolation. By refusing to link their electrical grid with the federation, for example, they qualified for just 20% of the $285 million in World Bank funds for the project rather than half the package.

Many of those struggling to survive in Pale, Republika Srpska’s capital, abandoned Sarajevo when their neighborhoods came under Muslim control as part of the Dayton accords.

But the once-besieged city they left behind--and much of the federation it governs--looks better by the day.

Sarajevo Thrives

Two hundred yards from Sarajevo’s battered front line, 80 Muslims and Croats driven from Bosnian Serb territory are working for Turkish contractors rebuilding a high school, their first steady income since the war.

About 150 cars are imported by the federation each day, many driven by their new owners from shopping trips to Germany. Sarajevo’s traffic jams are as bad as before the war, aggravated by four-wheel-drive vehicles from the U.N. and other peace-monitoring agencies that give direct employment and good salaries to hundreds of Bosnians on the federation side.

A Benetton fashion boutique and an Internet cafe have opened here, along with scores of restaurants and traditional outdoor cafes, frequented by reddened Sarajevans who have just rediscovered the Adriatic seacoast without remembering how to avoid sunburn.

The big Skenderija mall has 400 shops that, along with more basic goods, offer luggage, designer eye wear, health food, travel services, video games and color photo processing in 24 minutes. Fifteen to 20 new shops open each month.

“People got used to a life of subsistence during the war. After they went back to work, they kept sacrificing for another year to save for the big items they lost,” said Slobodan Samaraic, whose store is the mall’s top seller of washing machines, television sets and kitchenware. “I myself cannot understand how they managed, but they are spending now in a big way.”

So much cash is circulating that Esref Bibic, a husky 40-year-old who was shopping for a big-screen color television set and a stove in Samaraic’s store the other day, said he can afford such items without holding a steady job.

“I find ways,” said Bibic, who was blasted out of his home on the city’s front line and took over an abandoned apartment in the center.

“Nothing illegal,” he added of his means for earning money. “My friends drive trucks and taxis. When one of them can’t work, they call me and I fill in.”

A Wall of Fear

Because Bosnia is divided by a wall of fear, little of that money reaches into Republika Srpska. Serbian teachers have struck three times this year, repeatedly demanding timely payment of a $20 monthly wage, which often comes six months late. Serbian refugees from Sarajevo move into spare rooms of farmhouses so they can grow their own food. Or they line up at soup kitchens run by the International Committee of the Red Cross that feed an estimated 10% of the population.

The enclave’s leaders are struggling to restart factories. But their costliest effort so far--at an aluminum oxide plant in Zvornik that once employed 2,600 people--failed in March when Russia, citing overdue bills, cut off the natural gas on which the plant depends.

Kujaca, the sidewalk street vendor in Pale, was a tobacco factory technician in Sarajevo, her husband a heating plant supervisor there. In Pale they live with their 3-year-old triplet daughters in the living room of a friend’s home. He is unemployed.

“We had a good life in Sarajevo--a house, an orchard, a car, summers at the seaside,” said the 29-year-old Kujaca, crouching in faded jeans by her little table. “I know we could have all that again if we went back, but everyone should live with his own people. Whenever I miss Sarajevo, the fear stops me. I could not live among the Muslims now.”

Such sentiment is widespread among Serbs and bolsters their leaders’ refusal to carry out the peace accords, which in turn reinforces Serbian prejudices against a unified Bosnia.

“The Muslims are getting the jobs and we aren’t,” said Rada Srdanovic, 51, a Serb lined up at Pale’s soup kitchen. “The world is trying to blackmail us to go back to Sarajevo. It will never happen.”

But as awareness of the income gap spreads among Serbs, some have sided with their republic’s titular president, Biljana Plavsic, in her open defiance of Radovan Karadzic, the isolationist warlord and war crimes suspect who really runs the place. On Sunday, pro-Karadzic hard-liners expelled her from the ruling party.

She has accused Karadzic’s men in the police and ruling party of monopolizing the republic’s only lucrative ventures for personal gain, particularly the illicit sale of cigarettes, liquor and gasoline that flow in and out duty free. Fearful that Karadzic’s isolationism will destroy the ministate, Plavsic voices a willingness to cooperate on some points of the Dayton accords.

In the two weeks since her futile attempt to dismiss Karadzic’s police chief and parliament, thousands of Serbs have cheered Plavsic at rallies--more out of disgust with corruption, they say, than a desire to cooperate with the rest of Bosnia.

But Western officials here see the split as a new opportunity to press the cause of integration--by channeling aid to Serbian mayors loyal to Plavsic or those even more supportive of the peace accords. Local elections are scheduled in September under international supervision.

“If some city halls [in Republika Srpska] are won by cooperative people, they could open some doors and let businessmen take it from there,” said Mirza Hajric, an advisor to Alija Izetbegovic, the Muslim member of Bosnia’s dysfunctional three-man presidency.

“If we start trading, maybe the Serbs won’t be so afraid of us,” Hajric added. “If we leave it up to the politicians, nothing will change.”