oversight

Bosnia Peace Operation: Progress Toward Achieving the Dayton Agreement's Goals

Published by the Government Accountability Office on 1997-05-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United States General Accounting Office

GAO                Report to the Chairman, Committee on
                   Foreign Relations, U.S. Senate



May 1997
                   BOSNIA PEACE
                   OPERATION
                   Progress Toward
                   Achieving the Dayton
                   Agreement’s Goals




GAO/NSIAD-97-132
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      National Security and
      International Affairs Division

      B-272558

      May 5, 1997

      The Honorable Jesse Helms
      Chairman, Committee on Foreign Relations
      United States Senate

      Dear Mr. Chairman:

      This report discusses the Bosnia peace operation, specifically the progress made in achieving
      the operation’s objectives and U.S. costs and commitments in support of the operation. We are
      sending copies of the report to the Secretaries of State and Defense, the Administrator of the
      U.S. Agency for International Development, the Ranking Minority Member, Committee on
      Foreign Relations, and to other appropriate congressional committees. We will make copies
      available to others upon request.

      This report was prepared under the direction of Harold J. Johnson, Associate Director,
      International Relations and Trade Issues, who may be contacted on (202) 512-4128 if you or
      your staff have any questions about this report. Major contributors to the report are listed in
      appendix IX.

      Sincerely yours,




      Benjamin F. Nelson
      Director, International Relations
        and Trade Issues
Executive Summary


             The 1995 General Framework Agreement for Peace in Bosnia and
Purpose      Herzegovina and its supporting annexes (also known as the Dayton
             Agreement) provided the structure and mandates for an international
             operation intended to promote an enduring peace in Bosnia and stability in
             the region. While international in scope, the Bosnia peace operation has
             received important political, military, and financial support from the
             United States. At the request of the Chairman of the Senate Committee on
             Foreign Relations, GAO reviewed the implementation of the Bosnia peace
             operation, specifically the progress made in achieving the operation’s four
             key objectives since the operation began in December 1995 and U. S. costs
             and commitments in support of the operation. The operation’s objectives
             are to create conditions that allow Bosnia’s political leaders to (1) provide
             security for the people of Bosnia; (2) create a unified, democratic Bosnia
             that respects the rule of law and internationally recognized human rights,
             including cooperating with the war crimes tribunal in arresting and
             bringing those charged with war crimes to trial; (3) rebuild the economy;
             and (4) ensure the right of people to return to their prewar homes.

             To determine the progress made in achieving the operation’s key
             objectives, GAO visited numerous locations in Bosnia during July and
             December 1996, and obtained documentation and interviewed officials
             from U.S., international, military, and local governmental organizations
             there. GAO also gathered and analyzed information from the Departments
             of State, Defense, and the Treasury, and other U.S. government agencies;
             the World Bank, the United Nations, the Organization for Security and
             Cooperation in Europe, and other international organizations; and several
             participating foreign governments. In addition, GAO attended the Peace
             Implementation Council session in London in December 1996 where
             progress and the future of the peace operation were assessed by the
             international community. (A complete description of GAO’s scope and
             methodology is in chap. 1.)


             The war in Bosnia and Herzegovina was fought from 1992 through 1995
Background   among Bosnia’s three major ethnic/religious groups—Bosniaks (Muslims),
             Serbs (Eastern Orthodox Christians), and Croats (Roman Catholics).1
             During the war, Bosnian Serbs and Croats fought for and declared the
             establishment of ethnically pure states separate from Bosnia,2 while

             1
              This report defines “Bosniaks” as “Muslims,” the definition used in State Department human rights
             reports. The report also refers to any citizen of Bosnia as a “Bosnian,” regardless of ethnic group.
             2
             These states were never recognized by the international community, whereas Bosnia and Herzegovina
             was granted diplomatic recognition and became a member of the United Nations in 1992.



             Page 2                                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Executive Summary




Bosniaks fought for a unified, multiethnic Bosnia. United Nations and
other international mediators’ attempts throughout the war to stop the
fighting were generally unsuccessful, until U.S.-led negotiations in 1995
culminated in a cease-fire in October 1995 and the Dayton Agreement in
December 1995.

The Dayton Agreement declared that Bosnia is a single state consisting of
two entities that were created during the war: (1) the Bosnian Serb
Republic, known as Republika Srpska, and (2) the Federation, an entity
that joins together Bosniak- and Bosnian Croat-controlled areas of Bosnia.3
Most areas within Bosnia, with the exception of central Bosnia, are
populated and controlled by a predominant ethnic group as a result of
population movements during the war.

Implementing the Dayton Agreement was a complex, decentralized
operation with numerous objectives and subobjectives designed to assist
Bosnia’s political leaders achieve the commitments they had made in
signing the agreement. On the military side of the peace operation, the
North Atlantic Treaty Organization (NATO) authorized two military
forces—first the Implementation Force (IFOR) and later the Stabilization
Force (SFOR)—that had responsibility for mainly military objectives and
had clear lines of authority for planning and implementation. The United
States was the largest force provider to IFOR and SFOR, and Americans
occupied the key NATO military leadership positions that controlled their
operations.

On the civilian side of the operation, the Office of the High Representative
was established by the Dayton Agreement to assist the parties in
implementing the agreement and to coordinate assistance efforts, but it
had no operational authority over either the parties or the civilian
organizations and donors active in Bosnia. Other organizations
participating in the operation include the United Nations, with its
unarmed, civilian police monitoring operation—the International Police
Task Force—and other components; the Organization for Security and
Cooperation in Europe; and the United Nations High Commissioner for
Refugees. The United States has provided important political, financial,
and personnel support to organizations participating in the operation, as
well as to the international community’s economic reconstruction
program for Bosnia.


3
 U.S. mediation resulted in the establishment of the Federation in March 1994. Prior to this, the
Bosniak and Bosnian Croat armies were fighting each other in central Bosnia. The Federation
agreement led to a cease-fire between these two armies that held throughout the remainder of the war.



Page 3                                               GAO/NSIAD-97-132 Bosnia Peace Operation
                   Executive Summary




                   The peace operation faced a difficult task in attempting to help rebuild and
                   bring reconciliation to Bosnia. For example, by the end of the war, annual
                   per capita gross domestic product had fallen from its prewar level of
                   $1,900 to $500; less than 25 percent of the prewar working population was
                   employed; and war damage estimates ranged from $20 billion to
                   $30 billion.4 Further, the extreme nationalism that precipitated and grew
                   out of the war had made ethnic identity a critical factor in many aspects of
                   Bosnians’ daily life, and the violence, fear, and collapsed social structure
                   that resulted from the war had eroded support for pluralism.


                   The Bosnia peace operation has helped Bosnia take important first steps
Results in Brief   toward the Dayton Agreement’s goals. The NATO-led military forces have
                   created and sustained an environment that allows the peace process to
                   move forward and Bosnians to return to normal life. The cease-fire has
                   held, general security has improved, and some progress has been made in
                   establishing political and economic institutions. Additionally, the more
                   secure environment has allowed schools and shops to reopen, and families
                   to start repairing damaged homes. Nevertheless, while the task of
                   implementing the civil aspects of the Dayton Agreement has begun,
                   transition to an effective multiethnic government had not occurred. Bosnia
                   remains politically and ethnically divided, freedom of movement across
                   ethnic boundaries is still very constrained, and economic activity is still at
                   a low level. The limited progress to date has been due principally to the
                   failure of the political leaders of Bosnia’s three major ethnic groups to
                   embrace political and social reconciliation and to fulfill their obligations
                   under the Dayton Agreement. Major obstacles to the vision embodied in
                   the Dayton Agreement remain, particularly the lack of cooperation of
                   Bosnia’s political leaders, and experts say full political and social
                   reconciliation in Bosnia will be a long and difficult process.

                   The Bosnian people are more secure than before the Dayton Agreement.
                   The fighting has not resumed, forces have separated, and force reductions
                   on all sides have occurred. The U.S.-led “train and equip” program
                   intended to help stabilize the military balance in the region is progressing,
                   albeit slower than anticipated. Nonetheless, the Bosnian Serb political
                   leaders have not fully lived up to arms reduction agreements, little
                   progress has been made in reforming police forces so that they operate in
                   accordance with democratic policing standards, and the Department of



                   4
                    This is a World Bank estimate. The government of Bosnia estimates the damage at $50 billion to
                   $70 billion.



                   Page 4                                               GAO/NSIAD-97-132 Bosnia Peace Operation
Executive Summary




State believes an international military force is still the only deterrent to
major hostilities.

A unified, democratic state that respects the rule of law and adheres to
international standards of human rights has yet to be achieved. Although
national and entity-level elections were held, most institutions intended to
unify Bosnia’s ethnic groups are not yet functioning. Moreover, according
to human rights reports, the human rights situation worsened in the
months after the election, particularly in Bosnian Serb-controlled areas,
and ethnic intolerance remained strong throughout Bosnia. Additionally,
as of April 1997, only Bosniak authorities had surrendered indicted war
criminals to the war crimes tribunal; the other two parties had made no
arrests of indicted war criminals. U.S. and other officials view progress in
this area as critical to achievement of the overall Dayton objectives.

Economic conditions have improved somewhat since the end of the war.
Economic reconstruction has begun, and about $1.1 billion in international
assistance was disbursed in 1996 as part of the 3- to 4-year reconstruction
program. However, economic activity remains at low levels, and progress
toward building economic institutions designed to unify the country has
been very limited.

People generally have been unable to return to their prewar homes. Of the
estimated 2 million people who were forced or fled from their homes
during the war, only about 250,000 have returned home. Virtually no
returnees went back to homes in areas controlled by a different ethnic
group.

The executive branch initially estimated that U.S. military and civilian
participation in Bosnia would cost about $3.2 billion through fiscal year
1997. The total estimated cost for U.S. participation in the operation has
since risen to $7.7 billion. The increase is primarily due to the December
1996 decision to extend the presence of U.S. forces in and around Bosnia
until June 1998. Some State and Defense Department officials said that
based on current conditions, they believe some type of international
military force will likely be required after June 1998. U.S. participation in
such an effort could push the final cost significantly higher than the
current $7.7 billion estimate. The executive branch has repeatedly stated
that it plans to withdraw U.S. troops when the current mission ends in
June 1998.




Page 5                                    GAO/NSIAD-97-132 Bosnia Peace Operation
                          Executive Summary




Principal Findings

Progress in Providing a   To improve the security environment in Bosnia, the Dayton Agreement
Secure Environment        sought a durable cessation of hostilities,5 a stable military balance in the
                          region, and civilian police forces that operate in accordance with
                          democratic policing standards. The U.S. government believes that there
                          are two key elements of a stable military balance: arms control efforts
                          called for by the agreement and the train and equip program for the
                          Federation military that was established outside of the Dayton framework.
                          Some progress has been made in stabilizing the military situation, but
                          progress in reforming civilian police forces has been slow in the
                          Federation and virtually nonexistent in Republika Srpska.

                          Bosnia’s three militaries have observed the cease-fire, allowed IFOR and
                          later SFOR to monitor their weapons sites and troop movements, and have
                          reduced force levels by a combined total of 300,000. Moreover, the U.S.-led
                          program to train and equip the Bosniak and Bosnian Croat militaries as
                          they are integrated into a unified Federation military is making progress,
                          although somewhat more slowly than expected.6 As of March 1997, three
                          brigades were being trained, and heavy weapons from the United States
                          have been delivered. This program was delayed because Bosniak and
                          Bosnian Croat political leaders were slow to comply with conditions that
                          had been set, including the removal of foreign forces from Bosnia, the
                          enactment of legislation creating an integrated Defense Ministry and a
                          joint high command, and the replacement of certain officials.

                          However, the political leaders of all three major ethnic groups have failed
                          to fully comply with measures designed to achieve lasting security.
                          Republika Srpska has not lived up to its agreement to reduce its arms to
                          the lowest amount needed for its security. According to a State
                          Department official, the United States could increase assistance under the
                          Federation train and equip program to provide a military balance if the
                          Bosnian Serbs do not comply with the arms control agreements.

                          Furthermore, Bosnian Croat and Bosniak political leaders have made
                          limited progress in reforming their civilian police so that they provide
                          security for Bosnians of all ethnic groups and do not commit human rights


                          5
                           The Dayton Agreement does not define “a durable cessation of hostilities.”
                          6
                          The Federation defense law calls for the Bosniak and Bosnian Croat armies to be fully integrated by
                          August 1999.



                          Page 6                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                           Executive Summary




                           abuses; Bosnian Serb political leaders have yet to cooperate with the
                           International Police Task Force in reforming their police force. In
                           December 1996, the United Nations reported that Bosnia’s police are
                           responsible for most human rights violations—by some estimates as many
                           as 70 percent—that occur in Bosnia. A U.S. embassy official told GAO that
                           the primary problem in reforming police is that political leaders of all
                           three ethnic groups continue to use police as a means of furthering their
                           political aims.

                           In December 1996, the unstable security situation led to NATO authorizing
                           SFOR  for an 18-month mission to deter an outbreak of hostilities. Many
                           western observers told GAO that based on the current pace of political and
                           social change in Bosnia, some sort of international military force would
                           likely be needed there for many years to deter an outbreak of hostilities
                           while Bosnians continue the reconciliation process. The following three
                           sections discuss elements of Bosnia’s political and social reconciliation.


Progress in Developing a   Only limited progress has been made toward the Dayton objective of a
Unified, Democratic        unified, democratic Bosnia that upholds the rule of law and adheres to
Bosnia                     international standards of human rights. Under strong international
                           pressure, the parties had taken some steps to link politically the country’s
                           three major ethnic groups through the creation of national and
                           Federation-level governmental institutions, but continuing tension,
                           distrust, and political discord among Bosnia’s ethnic groups has slowed
                           progress toward a unified, democratic Bosnia.

                           U.S. officials acknowledge that progress toward a unified Bosnia depends
                           heavily on the willingness of the three ethnic groups’ political leaders to
                           cooperate in developing indivisible political institutions. This has not yet
                           happened. For example, institutions have been formed since the
                           September 1996 election and the three-person Presidency had met 15
                           times; but as of March 1997 the Parliamentary Assembly had met once but
                           passed no legislation; and the Council of Ministers had met 10 times but
                           had no staff, funding, or office space. Further, Bosnia’s three separate,
                           ethnically-based armies continue to be controlled by their wartime
                           political leaders. According to State, these armies must evolve into a
                           unified armed forces before Bosnia can become a unified country. The
                           committee called for in the Dayton Agreement to coordinate military
                           matters at the national level had not met as of March 1997.




                           Page 7                                  GAO/NSIAD-97-132 Bosnia Peace Operation
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The September 1996 elections that began the development of Bosnia’s
national institutions were intended to be a step in the progressive
achievement of democratic goals throughout Bosnia; however, it is unclear
what impact the elections will have on Bosnia’s democratic development.
According to State Department officials, the elections were a necessary
first step in developing democratic institutions in Bosnia, and they helped
develop a viable opposition that did better than expected against the ruling
political parties.

On the other hand, the Organization for Security and Cooperation in
Europe said that the elections were not held in a fully free and fair
environment. For example, opposition political parties were not permitted
to campaign in a free atmosphere and their access to the media was
restricted, as Bosnia’s ruling political parties controlled the media and
used it to propagate fear and insecurity among voters. State acknowledged
this, but believes the results nonetheless represented the will of the
people. A U.S. Agency for International Development (USAID) analysis
stated that the September 1996 election may have actually hampered
Bosnia’s democratic development because it kept in power authoritarian
political leaders. Some State and USAID officials acknowledged that these
victories may hinder efforts to build a democratic state, but no one was
surprised by the election outcome. State said that despite the election’s
flaws, it was an essential first step in creating democratic institutions in
Bosnia.

According to official intergovernmental agency monitoring reports, the
human rights situation actually worsened in the months following the
election, particularly in Republika Srpska, as the ruling parties worked to
consolidate their power. On April 14, 1997, the High Representative
reported that a precarious human rights situation, characterized by
widespread discrimination, harassment, and abuse on ethnic grounds,
continues to reign in Bosnia, with the most severe abuses occurring in
Republika Srpska and in Bosnian Croat-controlled areas.

Ethnic intolerance among all three ethnic groups and separatist tendencies
of Bosnian Serbs and Croats remain strong, in large part because Bosnia’s
political leaders have controlled the media and used it to discourage
reconciliation among the ethnic groups. A U.S. Information Agency poll
taken in January 1997 indicated that 79 percent of Bosnian Croats and
94 percent of Bosnian Serbs thought the areas under their control should
be part of Croatia and Serbia, respectively. In contrast, 99 percent of
Bosniaks wanted a unified country.



Page 8                                  GAO/NSIAD-97-132 Bosnia Peace Operation
                             Executive Summary




                             As of April 1997, 66 of the 74 people indicted by the war crimes tribunal
                             remained at large,7 some openly serving in official positions and/or
                             retaining their political power. While the Bosniaks had surrendered all
                             indicted war criminals in their area of control to the war crimes tribunal,
                             Bosnian Serbs and Bosnian Croats had not surrendered to the tribunal any
                             indicted war criminals in their areas. U.S. and other officials view progress
                             on this issue as central to the achievement of the Dayton Agreement’s
                             objectives, but the international community had not decided on how to
                             resolve this problem.


Progress in Rebuilding the   The Dayton Agreement viewed economic rehabilitation and reconstruction
Economy                      as essential to achieving peace—the negotiators believed that the people
                             must have an economic stake in the process to see that peace is better
                             than war. Thus, economic reconstruction, economic institution building,
                             and the promotion of a market economy were deemed to be of major
                             importance. To support these goals, the government of Bosnia, with the
                             assistance of the World Bank, the European Commission, the European
                             Bank for Reconstruction and Development, and other international
                             agencies and organizations, designed a 3- to 4-year, $5.1-billion Priority
                             Reconstruction Program. This program provided the international
                             community with the framework for the economic reconstruction and
                             integration of Bosnia.

                             In 1996, 59 donor countries and organizations pledged $1.9 billion to the
                             program, exceeding the first year goal of $1.8 billion, and disbursed $1.1
                             billion of those funds.8 The U.S. government, primarily through USAID,
                             committed $294.4 million during the program’s first year for, among other
                             things, repair of municipal infrastructure and services, small business
                             loans, and technical assistance for the development of national and
                             Federation economic institutions. By the end of 1996, there were many
                             signs of economic recovery, primarily in the Federation. For example, key
                             roads, rail links, and bridges were being restored, houses were being
                             repaired, and some basic services like water and heating were being
                             reestablished. The Sarajevo airport is now open to limited commercial
                             traffic, and the tram system has been restored to half its prewar capacity.
                             Over $100 million in business loans has helped revive commerce,


                             7
                              These figures do not include one person who was indicted by and surrendered to the war crimes
                             tribunal, but who was released by the tribunal for humanitarian reasons and later died.
                             8
                              World Bank data on funds that have been disbursed do not necessarily translate into results on the
                             ground. Hence, while $1.1 billion had been disbursed by December 1996, GAO cannot say what portion
                             of this represents physical results.



                             Page 9                                              GAO/NSIAD-97-132 Bosnia Peace Operation
                         Executive Summary




                         generating an estimated 11,000 new jobs. Also, two key Federation
                         agencies, the Federation Customs Administration and the Federation
                         Banking Agency, became operational during 1996.

                         At the end of 1996, however, economic activity was still at a very low level,
                         and much reconstruction work remained to be done. Furthermore, many
                         key national and Federation economic institutions—such as Bosnia’s
                         central bank—were not yet fully functioning. The biggest obstacle to
                         progress in economic reconstruction and economic institution building
                         has been the lack of cooperation among Bosnia’s political leaders in
                         implementing infrastructure projects and economic institutions that would
                         unite the ethnic groups within the Federation and across the two entities.
                         According to November 1996 and March 1997 donor reports, problems in
                         coordinating donor assistance have also contributed to delays in achieving
                         results, though the pace of disbursements accelerated after the middle of
                         the year.

                         Civilian landmine clearing, an area of critical importance to economic
                         reconstruction and refugee returns, did not start in Bosnia until the fall of
                         1996 due to, among other things, persistent disagreements between the
                         national and entity governments. In December 1996, a senior IFOR officer
                         told GAO that the political leaders of Bosnia’s three major ethnic groups do
                         not want to remove landmines because they believe the cease-fire is only a
                         temporary cessation of hostilities.


Progress in Returning    Despite guarantees in the Dayton Agreement and extensive international
Refugees and Displaced   effort to resolve the issue, the return of refugees and displaced persons to
Persons to Their Homes   their homes had barely begun in Bosnia as of March 1997. Fear, stemming
                         from lack of personal security; violence triggered by attempted
                         cross-ethnic returns; nonviolent resistance from Bosnia’s political leaders
                         of all ethnic groups; poor economic prospects; and lack of suitable
                         housing combined to hinder returns. The returns that did take place in
                         1996 were mainly people going back to areas controlled by their own
                         ethnic group because returns across ethnic lines proved nearly impossible.
                         Efforts to address the return problem touch many aspects of the Bosnia
                         peace operation, leading to calls by the international community for
                         improved integration between groups responsible for implementing the
                         Dayton Agreement’s security, political, and economic reconstruction
                         provisions.




                         Page 10                                  GAO/NSIAD-97-132 Bosnia Peace Operation
                  Executive Summary




U.S. Costs and    In February 1996, the executive branch estimated that the Bosnia peace
Commitments       operation would cost the United States about $3.2 billion for fiscal years
                  1996 and 1997: $2.5 billion in incremental costs for military-related
                  operations and $670 million for the civilian sector.9 These estimates
                  assumed that U.S. military forces would be withdrawn from Bosnia when
                  IFOR’s mission ended in December 1996. The executive branch’s current
                  cost estimate for fiscal years 1996 and 1997 is more than $5.9 billion: about
                  $5 billion in incremental costs for military-related operations and about
                  $941 million for the civilian sector. Almost all of the increase was due to
                  the decision to extend the U.S. military presence in and around Bosnia
                  through June 1998. In fiscal year 1998, the United States plans to commit
                  about $1.8 billion for the Bosnia peace operation: about $1.5 billion for
                  military operations and $340 million for civilian activities.

                  Under current estimates, which assume that U.S. military participation in
                  Bosnia will end by June 1998, the United States will provide a total of
                  about $7.7 billion for military and civilian support to the operation from
                  fiscal years 1996 through 1998.10


                  The Departments of State and Defense and USAID provided comments on a
Agency Comments   draft of this report. The Department of Defense generally concurred with
                  the report and offered only technical changes that have been incorporated
                  where appropriate. USAID said that, overall, the report provides
                  comprehensive information on progress in achieving the goals of the
                  Dayton Agreement, although it suggested that the accomplishments
                  achieved be given greater emphasis. In response to USAID comments,
                  additional information was added to our discussion of USAID programs in
                  chapter 4 and appendix V. However, GAO did not evaluate individual USAID
                  programs and is not in a position to comment on their effectiveness. Our
                  objective was to assess progress towards the broad objectives in the
                  Dayton Agreement.

                  The Department of State had two principal concerns with the draft report.
                  State said that the report does not adequately recognize the enormity of
                  the task of implementing the Dayton Agreement, nor does it sufficiently
                  discuss the progress made thus far. GAO believes that the report properly

                  9
                   Department of Defense costs are incremental costs; that is, they are costs that would not have been
                  incurred if it were not for the Bosnia operation.
                  10
                    At the time this report went to press, the Department of Defense was considering a proposed change
                  to the SFOR operational plan that would increase the number of SFOR troops around the time of the
                  municipal elections scheduled for September 1997. If approved, this option would likely change the
                  Defense Department’s cost estimates for fiscal years 1997 and 1998.



                  Page 11                                               GAO/NSIAD-97-132 Bosnia Peace Operation
Executive Summary




recognizes the difficulty of the task of bringing peace to Bosnia. The full
breadth of the overall challenge is outlined in chapter 1 and appendix I,
and additional context is provided in chapters 2 through 5 as each area of
Dayton implementation is assessed. GAO also believes that the report
presents a balanced picture of the progress made thus far in all sectors,
both militarily and in rebuilding civil society.

State also specifically disagreed with GAO’s reporting that (1) the human
rights situation had worsened in the months following the September 1996
elections and (2) the September 1996 elections may hinder Bosnia’s
democratic development. According to State, “it is categorically untrue”
that the human rights situation worsened in the months following the
election and that the elections may have hampered the process of
democratic development in Bosnia. GAO’s reporting on these matters is
based on an analysis of information contained in biweekly reports
submitted by on-the-ground human rights monitors from the Organization
for Security and Cooperation in Europe, an internationally recognized
organization, and information obtained from USAID and other sources. The
biweekly reports described a continuing deteriorating human rights
situation in many parts of Bosnia in the months following the elections.
This was particularly true, but not exclusively so, in Republika Srpska. GAO
fully acknowledges that the September 1996 elections may have been a
necessary first step in the process of democratic development in Bosnia
and that opposition parties did better than expected in the election.
However, GAO believes it is equally important to note that the election
resulted in legitimizing and keeping in power the authoritarian political
leaders who brought civil war and atrocities to Bosnia and who continue
to resist working cooperatively to achieve the goals of the Dayton
Agreement in the areas of democratic policing, the return of refugees, the
smooth functioning of national government institutions, and economic
integration, among other areas.

The agencies also provided technical comments that have been
incorporated in the report as appropriate. Comments received from
Defense, USAID, and State are reprinted in appendixes VI through VIII,
respectively.




Page 12                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Page 13   GAO/NSIAD-97-132 Bosnia Peace Operation
Contents



Executive Summary                                                                                 2


Chapter 1                                                                                        18
                        Situation in Bosnia at the Time of the Cease-Fire                        18
Introduction            Dayton Agreement and Related Side Agreements                             21
                        Decentralized Operation Established to Implement the Dayton              24
                           Agreement
                        Objectives, Scope, and Methodology                                       32

Chapter 2                                                                                        35
                        Cease-Fire Has Held, Weapons Were Put in Cantonment Sites,               35
Progress in Providing      and Forces Were Demobilized
a Secure Environment    Military Train and Equip Program Is Progressing Slowly                   37
                        Bosnian Serbs Have Not Complied With All Arms Control                    39
                           Agreements
                        Little Progress in Reforming Police Forces                               40
                        SFOR Established to Address Need for a Continued International           42
                           Military Force

Chapter 3                                                                                        44
                        Building Institutions Under Way, but Some Ethnic Groups Still            44
Progress in               Want Separate States
Developing a Unified,   Elections Were Held, but Were Considered Not Fully Free and              47
                          Fair
Democratic Bosnia       Human Rights Situation Worsened, and Ethnic Intolerance Was              49
                          Strong After the Election
                        Leadership of Two Ethnic Groups Have Not Cooperated With the             51
                          War Crimes Tribunal
                        Agency Comments and Our Evaluation                                       53

Chapter 4                                                                                        55
                        Donors Exceeded 1996 Pledging Goal for the Reconstruction                55
Progress in               Program
Rebuilding Bosnia’s     Economic Activity Remains at Low Level, but Signs of Economic            57
                          Recovery Now Visible
Economy                 Lack of Parties’ Cooperation and Problems in Donor                       60
                          Coordination Hinder Progress
                        Use of Conditionality in Providing Economic Assistance                   64




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                        Contents




Chapter 5                                                                                           66
                        Political Leaders Are Actively Discouraging Returns                         66
Progress in Returning   Poor Economic Conditions Deter Returns                                      70
Refugees and            Interrelated Nature of Return Issue                                         70
Displaced Persons to
Their Homes
Chapter 6                                                                                           72
                        Fiscal Year 1996 Estimates and Costs                                        72
U.S. Costs and          Fiscal Year 1997 Cost Estimates                                             75
Commitments Exceed      Fiscal Year 1998 Cost Estimates                                             76
Initial Estimates
Appendixes              Appendix I: Background on the Bosnian Conflict                              78
                        Appendix II: The Program to Train and Equip the Federation                  82
                          Army
                        Appendix III: Results of Bosnia’s September 1996 National and               89
                          Entity Elections
                        Appendix IV: Bosnia’s Priority Reconstruction and Recovery                  93
                          Program
                        Appendix V: U.S. Civilian Programs in Support of the Bosnia                102
                          Peace Operation, Fiscal Year 1996
                        Appendix VI: Comments From the Department of Defense                       113
                        Appendix VII: Comments From the U.S. Agency for International              114
                          Development
                        Appendix VIII: Comments From the Department of State                       118
                        Appendix IX: Major Contributors to This Report                             127

Tables                  Table 1.1: Goals and Specific Agreements of the Dayton                      23
                          Agreement and Related Programs
                        Table 3.1: Progress in Creating National Institutions                       45
                        Table 6.1: Comparison of Fiscal Year 1996 Estimates and Costs               72
                          for the Bosnia Peace Operation
                        Table 6.2: Fiscal Year 1996 DOD Costs for Bosnia, by Operation              73
                        Table 6.3: Fiscal Year 1996 U.S. Funding for Civilian Aspects of            74
                          the Bosnia Peace Operation
                        Table 6.4: Fiscal Year 1997 U.S. Cost Estimates for the Bosnia              75
                          Peace Operation




                        Page 15                                 GAO/NSIAD-97-132 Bosnia Peace Operation
          Contents




          Table II.1: Equipment Donations to the Train and Equip Program,           86
            as of March 31, 1997
          Table III.1: September 1996 Election Results for Bosnian                  89
            Presidency
          Table III.2: September 1996 Election Results for Federation               91
            House of Representatives
          Table III.3: September 1996 Election Results for Federation               91
            Cantonal Assemblies
          Table III.4: September 1996 Election Results for Republika                92
            Srpska Presidency
          Table III.5: September 1996 Election Results for Republika                92
            Srpska National Assembly
          Table IV.1: Donor Pledges and Commitments for Bosnia’s                    93
            Reconstruction Program, as of December 1996
          Table IV.2: 1996 Program Requirements, Commitments, and                   97
            Disbursements by Sector for the Bosnia Priority Reconstruction
            Program, as of December 1996
          Table IV.3: Sector Objectives of the Reconstruction Program               98
          Table IV.4: Distribution of Implemented and Disbursed Funds by           100
            Entity as of December 1996
          Table IV.5: Distribution of Disbursements in the Federation by           100
            Canton and Ethnic Composition, as of December 1996
          Table V.1: U.S. Funding for Civilian Aspects of Bosnia Peace             102
            Operation, Fiscal Year 1996

Figures   Figure 1.1: Destruction in Postwar Bosnia                                 20
          Figure 1.2: Map of Bosnia                                                 22
          Figure 1.3: Organization of the Bosnia Peace Operation in 1996            25
          Figure 1.4: IFOR Security for a Provisional Election Commission           30
            Meeting
          Figure 2.1: U.S. IFOR on Patrol                                           36
          Figure 3.1: Karadzic-SDS Campaign Poster Over OSCE Office in              52
            Doboj
          Figure 4.1: Donor Commitments to the Priority Reconstruction              56
            Program, as of December 1996
          Figure 4.2: USAID-funded Housing and Bridge Repairs                       60
          Figure 5.1: Blown Up Housing in the Brcko Area                            68
          Figure III.1: September 1996 Election Results for Bosnian House           90
            of Representatives




          Page 16                               GAO/NSIAD-97-132 Bosnia Peace Operation
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Abbreviations

CIMIC       Civil Military Cooperation
CIRP        Community Infrastructure Rehabilitation Project
DOD         Department of Defense
EBRD        European Bank for Reconstruction and Development
HDZ         Croatian Democratic Union
IFOR        Implementation Force
IMF         International Monetary Fund
IMET        International Military Education and Training
IPTF        International Police Task Force
JCC         Joint Civilian Commission
NAC         North Atlantic Council
NATO        North Atlantic Treaty Organization
OSCE        Organization for Security and Cooperation in Europe
PIC         Peace Implementation Council
SDA         Bosniak Party of Democratic Action (1996) Muslim Party
                  of Democratic Action (1990)
SDS         Serb Democratic Party
SFOR        Stabilization Force
SHAPE       Supreme Headquarters, Allied Powers Europe
UNHCR       United Nations High Commissioner for Refugees
UNICEF      United Nations Children’s Fund
UNMIBH      United Nations Mission in Bosnia and Herzegovina
UNPROFOR    United Nations Protection Force
USAID       U.S. Agency for International Development
USIA        U.S. Information Agency


Page 17                            GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 1

Introduction


                         The 1992-95 war in Bosnia and Herzegovina (referred to as Bosnia) was
                         part of the violent dissolution of Yugoslavia, which had been an ethnically
                         diverse federation of six republics with almost no history of democratic
                         governance or a capitalist economy. The war was fought among Bosnia’s
                         three major ethnic/religious groups—Bosniaks (Muslims), Serbs (Eastern
                         Orthodox Christians), and Croats (Roman Catholics)1—the latter two
                         being supported directly by the republics of Serbia and Croatia,
                         respectively. During the war, Bosnian Serbs and Croats fought for and
                         declared the establishment of ethnically pure states separate from Bosnia:
                         Bosnian Serbs established Republika Srpska, and Bosnian Croats
                         established Herceg-Bosna.2 In contrast, Bosniaks fought for a unified,
                         multi-ethnic Bosnia.

                         In March 1994, U.S. mediation resulted in the establishment of the
                         Federation, a joint Bosniak-Bosnian Croat entity.3 The United Nations and
                         other international mediators were generally unsuccessful in their
                         attempts to stop the war until the U.S. government took the lead in
                         negotiations during mid-1995. By October 1995, a cease-fire among all
                         three militaries was established. In December 1995, the Dayton Agreement
                         was signed, continuing the complex and difficult process of attempting
                         reconciliation among the parties to the conflict. A brief history of events
                         leading to the conflict in Bosnia and a discussion of the international
                         community’s role through the fall of 1995 is in appendix I.


                         At the time of the cease-fire, Bosnia’s three militaries had over 400,000
Situation in Bosnia at   men under arms, including armed civilian militias and an estimated 45,000
the Time of the          police that fought in conjunction with the three armies. The soldiers were
Cease-Fire               largely deployed facing each other in static lines of fortified bunkers and
                         trenches, behind minefields containing millions of landmines. These
                         fortifications formed a nearly continuous front line over 1,100 kilometers
                         long that split the country into two separate entities.

                         The war and its social dislocations left Bosnia a shattered country. Out of
                         a population of 4.4 million, an estimated 250,000 people were killed or
                         missing and 200,000 wounded. Over 2 million had fled or were forcibly

                         1
                          For purposes of this report, the term “Bosnian” refers to any citizen of Bosnia, regardless of ethnic
                         group.
                         2
                         These states were never recognized by the international community, whereas Bosnia and Herzegovina
                         was granted diplomatic recognition and became a member of the United Nations in 1992.
                         3
                          It also led to a cease-fire between the Bosniak and Bosnian Croat armies, which continued to fight
                         against the Bosnian Serb army.



                         Page 18                                                 GAO/NSIAD-97-132 Bosnia Peace Operation
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Introduction




driven from their homes, many as the result of “ethnic cleansing.” While
the fighting raged from 1992 through the late 1995, civilians received 85
percent of their food through the United Nations. At the end of the war,
about 80 percent of Bosnians were relying on outside food aid, annual per
capita gross domestic product was at about $500—down from $1,900 in
1990—and less than 25 percent of the prewar working population war
employed. Estimates of war damage ranged from $20 billion to $70 billion.4
Two-thirds of private houses in Bosnia were damaged or destroyed; roads,
bridges, telecommunications, health care facilities, and schools were
seriously damaged; and industrial output was about 5 percent of its prewar
level. (See figure 1.1.)

Due to extreme nationalism that precipitated and grew out of the war,
ethnic identity had become a critical factor in determining whether one
would keep a job or lose it, remain at home or be driven out, and all too
often live or die. Throughout Bosnia, the war had resulted in violence,
fear, and a collapsed social structure, conditions that had eroded support
for pluralism. In Bosniak and Bosnian Croat-controlled areas, the ruling
Bosniak and Bosnian Croat political parties only partially respected civil
liberties, exerting great influence over the media and political activity. In
Bosnian Serb-held territory, the ruling party controlled both the media and
political activity and did not permit dissent.




4
 The World Bank estimates damage to be $20 billion to $30 billion. The government of Bosnia
estimates the damage at $50 billion to $70 billion.



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                                            Chapter 1
                                            Introduction




Figure 1.1: Destruction in Postwar Bosnia




                                            Page 20        GAO/NSIAD-97-132 Bosnia Peace Operation
                   Chapter 1
                   Introduction




                   Building on the October 1995 cease-fire, representatives from Croatia, the
Dayton Agreement   Federal Republic of Yugoslavia,5 and Bosnia’s three major ethnic groups
and Related Side   signed the Dayton Agreement in Paris on December 14, 1995. The
Agreements         agreement declared that Bosnia is a single state consisting of the two
                   entities that had been created during the war—Republika Srpska and the
                   Bosniak-Croat Federation—and divided them by an interentity boundary
                   line (see fig. 1.2). Both entities agreed to the transfer of territory.
                   Republika Srpska would comprise 49 percent of Bosnia (and nearly all of
                   the Bosnian Serb-controlled areas), and the Federation would consist of
                   51 percent of Bosnia. The Federation territory would be made up of
                   noncontiguous areas of Bosniak and Bosnian Croat control. Most areas
                   within Bosnia, with the exception of central Bosnia, are populated and
                   controlled by a predominant ethnic group as a result of population
                   movements during the war.




                   5
                   The former Yugoslavia republics of Serbia and Montenegro have asserted a joint independent state
                   with this name. The United States has not recognized this entity.



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                                                    Chapter 1
                                                    Introduction




Figure 1.2: Map of Bosnia (as of October 1996)



                                                                    Croatia



                                                                                                Brcko
             Bihac

                                                    Banja Luka



                                                                                       Tuzla
     Croatia                                                                                                    Serbia




                                                                            SARAJEVO




                                                                   Mostar




                                                                                                      Montenegro
          Bosniak Control

          Bosnian Croat Control
                                  }   Federation


          Bosnian Serb Control - Republika Srpska
          Interentity Boundary Line




                                                    Page 22                            GAO/NSIAD-97-132 Bosnia Peace Operation
                                     Chapter 1
                                     Introduction




                                     At the time the Dayton Agreement was signed, the Bosniaks and Bosnian
                                     Croats also signed a related side agreement on the development of
                                     Federation economic and governmental institutions. Also, the U.S.
                                     government initiated a separate program to train and equip a unified
                                     Federation military. According to State Department officials, the program
                                     is intended to correct an imbalance of military power in the region and
                                     fulfill a commitment the U.S. government made to the Bosniaks in return
                                     for their approval of the Dayton Agreement.

                                     In signing the Dayton Agreement and related side agreements, political
                                     leaders of Bosnia’s three major ethnic groups pledged to provide security
                                     for the people of Bosnia; create a unified, democratic Bosnia within
                                     internationally recognized boundaries; rebuild the economy; and ensure
                                     the right of people to return to their homes (see table 1.1). In response to
                                     the leaders’ request for assistance in achieving these goals, the
                                     international community established the Bosnia peace operation.

Table 1.1: Goals and Specific
Agreements of the Dayton Agreement   Operation’s goals               Specific agreements
and Related Programs                 Provide security for the        Maintain cease-fire and separate forces; undertake arms
                                     people of Bosnia                control; participate in train and equip program; maintain
                                                                     civilian police that provide security for all people in
                                                                     jurisdiction and respect human rights.
                                     Create a unified, democratic    Implement national constitution that calls for the creation
                                     Bosnia within internationally   of national institutions; create functioning Federation
                                     recognized boundaries           institutions; ensure conditions exist for free and fair
                                                                     elections that would be a step in country’s democratic
                                                                     development; secure highest level of human rights for all
                                                                     persons; cooperate with the international war crimes
                                                                     tribunal.
                                     Rebuild the economy             Rehabilitate infrastructure and undertake economic
                                                                     reconstruction; create a central bank; economically
                                                                     integrate the Federation: unify the payments systems,
                                                                     activate the Federation Customs and Tax Administrations,
                                                                     prepare a Federation budget.
                                     Ensure the right of people to   Allow all refugees and displaced persons the right to
                                     return to their homes           freely return to their homes; take actions to prevent
                                                                     impediments to safe return; cooperate with international
                                                                     organizations; establish an independent property
                                                                     commission.




                                     Page 23                                         GAO/NSIAD-97-132 Bosnia Peace Operation
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                        Introduction




                        The Dayton Agreement and its various annexes established a decentralized
Decentralized           organizational structure to implement the agreement. This structure is
Operation Established   depicted graphically in figure 1.3. The agreement specified that a military
to Implement the        force led by the North Atlantic Treaty Organization (NATO) would
                        implement provisions of the agreement designed to stop the parties’
Dayton Agreement        military operations. The NATO force would thereby provide general security
                        and a discrete amount of time for the peace operation’s other
                        organizations to help Bosnians attain the political and social reconciliation
                        necessary for a more durable cessation of hostilities. The implementing
                        organizations and their roles are described below. None of these
                        organizations had the mandate to arrest indicted war criminals.




                        Page 24                                 GAO/NSIAD-97-132 Bosnia Peace Operation
                                          Chapter 1
                                          Introduction




Figure 1.3: Organization of the Bosnia Peace Operation in 1996


                                                                                                      World Bank
       NATO                 OSCE               PIC steering                                                                     Bilateral donors
                                                                        United Nations              European Union
       NAC                                        board                                               IMF EBRD




      SHAPE




                                                  High                                                                 Economic
       IFOR             OSCE mission                                     UNHCR            UNMIBH
                                              Representative                                                         reconstruction
                                                                                                                        projects


 Ground                                                JCC
               CIMIC          Elections                                                     IPTF
operations




   Air                         Human               JCC working
                                                                                         Civil affairs
operations                     rights                groups




  Naval                         Arms                Interagency                          Mine action
operations                     control               task forces                           center




                                                    Authority
                                                    Coordination
                                                    Outside Bosnia

                                                    Inside Bosnia

                                           Note: Coordination in Bosnia occurs at all levels among these organizations.

                                          Source:GAO analysis.

                                          Legend

                                          NAC = North Atlantic Council
                                          SHAPE = Supreme Headquarters, Allied Powers Europe
                                          IFOR = Implementation Force
                                          CIMIC = Civil Military Cooperation
                                          OSCE = Organization for Security and Cooperation in Europe
                                          PIC = Peace Implementation Council
                                          JCC = Joint Civilian Commission
                                          UNHCR = United Nations High Commissioner for Refugees
                                          UNMIBH = United Nations Mission in Bosnia and Herzegovina
                                          IPTF = International Police Task Force
                                          IMF = International Monetary Fund
                                          EBRD = European Bank for Reconstruction and Development




                                          Page 25                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                           Chapter 1
                           Introduction




                           By design, the Dayton Agreement did not give any one organization
                           authority over the entire peace operation. Instead, the operation’s NATO-led
                           force and major civilian organizations responded to different lines of
                           authority. At no single point did planning for each of the major
                           organization’s activities come together in a civil-military or consolidated
                           civilian plan for Dayton implementation in 1996, although coordination
                           occurred at all levels of the operation, and the NATO force often supported
                           the civilian organizations.


NATO-Led Implementation    The Dayton Agreement called for the creation of an international military
and Stabilization Forces   force under NATO command, to enforce annex 1A of the Dayton
                           Agreement.6 IFOR was created for this purpose, and began operations in
                           December 1995.7 As outlined by annex 1A, IFOR’s primary military tasks
                           were to ensure (1) continued compliance with the October 1995 cease-fire,
                           (2) the separation of the three Bosnian parties’ militaries and their
                           withdrawal from the zone of separation back to their respective
                           territories,8 (3) the collection of heavy weapons into cantonment sites and
                           troops into barracks, and (4) the demobilization of remaining forces. If
                           resources were available, IFOR was also expected to (1) help create secure
                           conditions for the conduct of other Dayton Agreement tasks, such as
                           elections; (2) assist the UNHCR and other international organizations in
                           their humanitarian missions; (3) observe and prevent interference with the
                           movement of civilian populations, refugees, and displaced persons, and
                           respond appropriately to deliberate violence to life and person; and
                           (4) monitor the clearing of minefields and obstacles.

                           Annex 1A called for IFOR to complete its mission in about 1 year and be
                           withdrawn from Bosnia by December 1996. As of July 1996, IFOR consisted
                           of about 54,000 troops from 34 countries—15 NATO countries and 19
                           non-NATO countries. The United States, the largest force provider to IFOR,
                           contributed about 16,200 troops9 to the operation, and Americans


                           6
                            IFOR, and later SFOR, had the authority to use force to ensure implementation of annex 1A and the
                           protection of IFOR. The U.N. Security Council provided IFOR’s authority to use force in Resolution
                           1031 on December 15, 1995, and provided SFOR’s authority in Resolution 1088 on December 12, 1996.
                           7
                            The transfer of authority from the U.N. Protection Force (UNPROFOR) to IFOR took place on
                           December 20, 1995. At that time, all NATO and non-NATO forces participating in the operation,
                           including about 17,000 UNPROFOR troops, came under the command and/or control of the IFOR
                           Commander.
                           8
                            The zone of separation is an area generally 2 kilometers wide on each side of the interentity boundary
                           line between the Federation and Republika Srpska.
                           9
                            In addition, about 6,000 U.S. troops were stationed outside Bosnia to provide support to IFOR.



                           Page 26                                               GAO/NSIAD-97-132 Bosnia Peace Operation
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                         Introduction




                         occupied the key NATO military leadership positions that controlled the
                         operation.

                         Recognizing the need for a continued international military force, in
                         December 1996 the North Atlantic Council authorized a new mission—the
                         stabilization force (SFOR)—for an 18-month period that will end in June
                         1998.10 The mission of SFOR is to deter renewed hostilities and to stabilize
                         and consolidate the peace in Bosnia. SFOR has an authorized force level of
                         31,000 troops or about half the size of IFOR. As of January 13, 1997, SFOR
                         had a force level of about 36,000 troops, including about 8,500 U.S. troops
                         in Bosnia.11 As with IFOR, the United States is the largest force provider to
                         NATO’s operation in Bosnia, and Americans hold the key NATO military
                         positions that control the operation. The North Atlantic Council provided
                         political guidance to both NATO military operations.

                         The Commanders of IFOR and SFOR had the authority to control the
                         operations of all NATO and non-NATO forces participating in the missions,
                         within the operational parameters specified by each participating
                         country’s national command authority.12 The NATO forces had an integrated
                         headquarters, including planning staff, for all military operations. No
                         civilian organization in Bosnia had authority over NATO operations there.


Civilian Organizations   In contrast to IFOR and SFOR’s unified structure, no organization has
                         authority over all of the operation’s major civilian organizations. These
                         organizations are described below.

Office of the High       The Dayton Agreement created the Office of the High Representative and
Representative           gave the High Representative many responsibilities, including monitoring
                         implementation, coordinating civilian organizations, maintaining close
                         contact with the parties, and giving the final interpretation in theater on
                         civilian implementation of the agreement. However, according to officials
                         from the Office of the High Representative, the agreement did not give the
                         High Representative the authority to control any organization beyond his
                         own staff and required him to respect the autonomy of the operation’s

                         10
                          The North Atlantic Council is NATO’s political authority and consists of permanent representatives
                         of all 16 member countries. It has decision-making power over and provides political guidance to
                         NATO military operations.
                         11
                           The United States also contributed 5,000 troops to support SFOR from locations outside of Bosnia.
                         12
                           National command authority remained with each country. Participating countries allowed their
                         forces to participate in IFOR within specified areas and with specific rules of engagement. When the
                         IFOR Commander wanted to deploy forces outside of agreed areas, participating forces would request
                         permission through their national command authorities who would approve or deny the request.



                         Page 27                                               GAO/NSIAD-97-132 Bosnia Peace Operation
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                                Introduction




                                civilian organizations. According to officials from this office, the role of
                                the High Representative is to help resolve political issues associated with
                                the agreement, rather than deal with detailed operational questions. The
                                High Representative did not have the ability to enforce the parties’
                                compliance with the civil provisions of the Dayton Agreement. IFOR
                                provided physical support to the High Representative’s headquarters and
                                field offices by providing staff and limited logistical support for their
                                operations.

                                The High Representative received political guidance from the Steering
                                Board of the Peace Implementation Council, which was created in
                                December 1995.13 The council’s Steering Board consisted of eight
                                countries and three multilateral organizations and is chaired by the High
                                Representative.

United Nations Mission in       UNMIBH is headed by the Secretary General’s Special Representative in
Bosnia and Herzegovina          Bosnia, who is the U.N. Chief of Mission and U.N. Coordinator for Bosnia.
                                UNMIBH consists of IPTF, U.N. Civil Affairs, and the Mine Action Center.


                            •   IPTF had about 1,700 unarmed police monitors from 34 different countries
                                deployed throughout Bosnia as of December 1996. IPTF’s mandate through
                                December 1996 was to (1) monitor, observe, and inspect the parties’ law
                                enforcement activities and facilities; (2) advise governmental authorities
                                on how to organize effective civilian law enforcement agencies; and
                                (3) advise and train law enforcement personnel. IPTF’s mandate does not
                                include power of arrest. In December 1996, its mandate was expanded to
                                include the investigation and reporting of human rights abuses by Bosnia’s
                                police. When requested, IFOR troops supported IPTF by accompanying
                                monitors on their patrols, helping them to inspect weapons at police
                                stations, and providing backup security support.
                            •   U.N. Civil Affairs officers (1) analyze and report on local political events
                                and trends; (2) provide regular briefings on local political dynamics to IPTF
                                commanders and assist them in developing working relationships with
                                local and international officials; and (3) assist local authorities in
                                confidence-building and problem-solving methods to help in establishing
                                local government bodies.
                            •   The Mine Action Center’s mandate was to coordinate donor’s mine
                                awareness and mine clearance activities and to encourage the Bosnian
                                government to assume full responsibility for mine clearance. IFOR helped



                                13
                                  The Peace Implementation Council is a large deliberative body. It has only met twice since its
                                inception, once in June 1996 and again in December 1996.



                                Page 28                                                GAO/NSIAD-97-132 Bosnia Peace Operation
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                                Introduction




                                the Mine Action Center develop its minefield database by providing the
                                center with reports of minefield locations.

United Nations High             UNHCR’s  role in the implementation of the Dayton Agreement was to work
Commissioner for Refugees       with the parties to develop a repatriation plan that would allow the early,
                                peaceful, and phased return of refugees and displaced persons. UNHCR
                                chaired international and local meetings of the numerous assistance
                                providers and developed databases tracking the delivery of humanitarian
                                assistance at the local level. To foster returns, among other things UNHCR
                                refurbished about 18,000 homes, operated 11 bus lines that crossed ethnic
                                lines, and facilitated cross-ethnic visits to prewar homes. IPTF helped
                                coordinate and monitored local police support for many of these efforts,
                                and when requested, IFOR provided a site specific security presence for
                                assessment visits.

Organization for Security and   OSCE, an organization of 55 member countries,14 was assigned
Cooperation in Europe           responsibility for supervising the election process, monitoring human
                                rights, assisting with negotiation and implementation of confidence
                                building measures and arms control. OSCE made the final decision on
                                whether to hold elections mandated by the Dayton Agreement and
                                certified the validity of election results. In addition, the head of the OSCE
                                mission in Bosnia chaired the Provisional Election Commission, the
                                organization that established election rules and regulations. This
                                commission included representatives of each of Bosnia’s three major
                                ethnic groups.

                                In July 1996, OSCE’s Director General for Elections told us that without
                                IFOR’s support, OSCE would not be able to administer the elections within
                                the time period specified in the Dayton Agreement.15 According to an OSCE
                                report, IFOR provided substantial assistance for the election, including staff
                                support for planning and operations, area security, air and land transport,
                                radio networks, operations centers, publicity through the IFOR information
                                campaign, and mapping. (See fig. 1.4.) Further, IFOR and IPTF developed
                                security plans used by OSCE, and IPTF provided training for all three of
                                Bosnia’s police forces on election security.




                                14
                                  One member of the OSCE, the Federal Republic of Yugoslavia (Serbia and Montenegro), is not
                                recognized as a state by the United States.
                                15
                                  The Dayton Agreement required OSCE to conduct elections for national and entity level positions no
                                later than September 14, 1996.



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Figure 1.4: IFOR Security for a Provisional Election Commission Meeting (July 1996)




Bilateral and Multilateral Donor           During 1996, 59 donors—11 multilateral and private organizations and 48
Organizations                              countries—provided funds for Bosnia’s reconstruction program, known as
                                           the Priority Reconstruction and Recovery Program. The reconstruction
                                           program is a 3- to 4-year, $5.1 billion-effort that intends to provide a
                                           common framework for donor support for the country’s reconstruction.
                                           The government of Bosnia and Herzegovina prepared the plan for the
                                           program, with the support of the World Bank, the European Commission,
                                           the European Bank for Reconstruction and Development, and other
                                           donors. Many multilateral organizations and donor governments
                                           established policy for their own efforts that support the reconstruction
                                           program. IFOR and humanitarian assistance organizations, including UNHCR,
                                           supported the reconstruction effort through the implementation of
                                           small-scale, quick impact assistance projects.

Brcko Supervisory Structure                At Dayton, the parties were unable to agree on which of Bosnia’s ethnic
Added in Early 1997                        groups would control the strategically important area in and around the
                                           city of Brcko. The agreement instead called for an arbitration tribunal to



                                           Page 30                                    GAO/NSIAD-97-132 Bosnia Peace Operation
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Introduction




decide this issue by December 14, 1996. The tribunal consisted of three
members: a Bosnian Serb, a Bosniak, and an American. The American
arbitrator was selected by the President of the International Court of
Justice and was granted authority to issue rulings on his own, including a
final award, if the board could not reach consensus. At the end of the war,
Brcko was controlled by Bosnian Serb political leaders and populated
predominately by Serbs due to “ethnic cleansing” of the prewar Muslim
and Croat population and resettlement of Serb refugees there. We were
told by western observers in Bosnia that an arbitration decision that
awarded control of the area to either the Bosniaks or Bosnian Serbs would
lead to civil unrest and would possibly restart the conflict because the
location of Brcko made it vitally important to both parties’ respective
interests.

After granting a request for a 2-month extension, the tribunal issued its
decision on February 14, 1997. In the decision, the tribunal called for the
international community to designate a supervisor under the auspices of
the Office of the High Representative, who would establish an interim
supervisory administration for the Brcko area.16 This organization would
be designed to supervise the implementation of the civil provisions of the
Dayton Agreement in the Brcko area: specifically, to allow former Brcko
residents to return to their homes, provide freedom of movement and
other human rights throughout the area, give proper police protection to
all citizens, encourage economic revitalization, and lay the foundation for
local representative democratic government. As of March 27, 1997, the
interim administration was scheduled to start on April 1, 1997, and is to
operate for at least 1 year.17

On March 7, 1997, the Peace Implementation Council Steering Board
announced that the High Representative had appointed a U.S. official as
Brcko supervisor. The Steering Board stated that the High Representative
was to ask the U.N. Secretary General to add 200 IPTF monitors to promote
respect for freedom of movement and to facilitate the orderly and phased
return of refugees in the Brcko area; on March 31, 1997, the Security
Council authorized an increase in the strength of UNMIBH by 186 police
monitors and 11 civilian personnel for this purpose. The board also called
for other steps to help implement the Dayton Agreement in Brcko, such as

16
  The tribunal decision noted that (1) the national and entity governments were not sufficiently mature
to take on the responsibility of administering the city, and (2) Republika Srpska’s disregard of its
Dayton implementation obligations in the Brcko area had kept the tensions and instability at much
higher levels than expected. Only the American member of the tribunal signed the decision.
17
 The arbitration tribunal may make a further decision on the status of the Brcko area by March 15,
1998, if the parties request such action between December 1, 1997, and January 15, 1998.



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                     Introduction




                     targeting economic assistance for repairs to Brcko’s infrastructure,
                     transportation links, housing, and social facilities. The arbitration decision
                     and a Peace Implementation Council document noted the need for civilian
                     coordination with SFOR in implementing the arbitration decision, but they
                     did not describe SFOR’s role in assisting the effort.

                     As described in these documents, the Brcko supervisor has more specific
                     responsibility in this area of operations than the High Representative has
                     in Bosnia in general. The tribunal’s decision gave the supervisor authority
                     to issue binding regulations and orders to assist in implementing the
                     Dayton Agreement in the Brcko area and to strengthen the area’s local
                     democratic institutions. These regulations and orders would prevail over
                     existing laws in the area if a conflict existed. Further, in reaffirming the
                     right of persons to return to their homes of origin, the Peace
                     Implementation Council said that any new influx of refugees or displaced
                     persons should occur only with the consent of the supervisor in
                     consultation with UNHCR. Neither document, however, described how the
                     supervisor would enforce his regulations, orders, or decisions if the
                     parties did not choose to comply.


                     At the request of the Chairman, Senate Committee on Foreign Relations,
Objectives, Scope,   we reviewed the implementation of the Bosnia peace operation. Our
and Methodology      specific objectives were to determine what progress had been made in
                     achieving the operation’s objectives since the operation began in
                     December 1995 and identify U.S. costs and commitments in support of the
                     operation. In determining progress, we focused on the operation’s four key
                     goals, which are to create conditions that allow Bosnia’s political leaders
                     to (1) provide a secure environment for the people of Bosnia; (2) develop a
                     unified, democratic country; (3) rebuild the economy; and (4) return
                     refugees and displaced persons and ensure their right to return to their
                     prewar homes. In addition, we reviewed the progress of the program
                     designed to train and equip the Federation military.

                     To determine progress, we made field visits to Bosnia in July and
                     December 1996. We did audit work in Sarajevo, Mostar, Stolac, Capljina,
                     Gornji Vakuf, Vitez, Banja Luka, Doboj, Tuzla, Brcko, Kalesija, Zenica,
                     Ugljevik, and numerous villages throughout Bosnia. While in Bosnia we
                     interviewed officials and obtained documents from the U.S. Embassy; U.S.
                     Agency for International Development (USAID); U.S. Information Agency
                     (USIA); the headquarters of IFOR, two of its multinational division
                     headquarters, and three of its non-U.S. brigade headquarters; the Office of



                     Page 32                                  GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 1
Introduction




the High Representative; UNMIBH, including IPTF, U.N. Civil Affairs, and the
Mine Action Center; the World Bank; the European Union Administration
in Mostar; UNHCR; OSCE; government officials and opposition party leaders;
and numerous nongovernmental organizations.

We also interviewed officials and obtained documents from (1) the
Departments of State, Defense (DOD), and the Treasury; USAID; USIA; the
Central Intelligence Agency; the World Bank; the European Commission;
the Embassy of Bosnia-Herzegovina; and numerous nongovernmental
organizations in Washington, D.C.; (2) the U.S. Mission to the U.N. and
U.N. headquarters in New York, New York; (3) the U.S. European
Command and U.S. Army Europe in Germany; (4) the U.S. mission to NATO,
NATO international staff, the European Commission, and the Office of the
High Representative in Brussels, Belgium; (5) the U.S. Mission and the
United Kingdom delegation to the OSCE in Vienna, Austria; and (6) U.S.
Embassy, IFOR support units, UNHCR, and U.N. Civil Affairs in Zagreb,
Croatia. We also attended the Peace Implementation Council conference
in London, England, in December 1996. Many of the officials with whom
we met, including officials in the United States, assisted us in interpreting
the Dayton Agreement’s provisions. In addition, we interviewed academic
experts on the history and culture of Bosnia and the former Yugoslavia.

To assess progress toward achieving the operation’s objectives, we
compared conditions in Bosnia with the goals laid out in Dayton and
related agreements. We analyzed numerous situation reports from many
organizations participating in the operation and reviewed U.S. and NATO
documents. We also interviewed many observers of the situation in Bosnia
to expand upon or clarify information contained in the situation reports.
To gain an understanding of the obstacles and opportunities facing the
operation, we interviewed experts on the history, culture, and politics of
Bosnia and the former Yugoslavia.

To assess U.S. costs and commitments for civilian programs and activities,
we contacted 14 U.S. civilian agencies and the Defense Security Assistance
Agency to collect the financial and programmatic information. Of these 15
agencies, 11—USAID, USIA, the Defense Security Assistance Agency, the
Trade and Development Agency, and the Departments of State, the
Treasury, Commerce, Agriculture, Health and Human Services, Labor, and
Justice—reported that they had incurred costs related to the Bosnia peace
operation. Obligations of these agencies represent binding agreements,
such as orders placed or contracts awarded, that will require payment
immediately or in the future. The data reported included only program



Page 33                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 1
Introduction




costs for U.S. agencies, except that we also included USAID’s salary and
overhead identified in the fiscal year 1996 supplemental appropriation for
Bosnia. We also included funds provided by U.S. agencies for the
operating expenses of non-U.S. organizations that were participating in the
peace operation.

For DOD, we collected information on incremental costs for operations
inside and outside of Bosnia that supported IFOR and SFOR. DOD defined its
incremental costs as those costs that would not have been incurred were it
not for the peace operation.

We generally excluded DOD and civilian agency costs for U.N.
peacekeeping operations in the former Yugoslavia that operate outside of
Bosnia, such as the U.N. Transitional Authority in Eastern Slavonia and
the peacekeeping operation in Macedonia. We also did not include U.S.
annual contributions to multinational organizations, such as the World
Bank or NATO, that subsequently provided financing or funded programs;
however, we did include U.S. voluntary payments to multinational
organizations that specifically supported U.S. programs, such as funding to
UNHCR for humanitarian assistance.


We conducted our work from March 1996 through March 1997 in
accordance with generally accepted government auditing standards. We
did not verify the accuracy and completeness of the information DOD or
civilian agencies provided to us. Our information on foreign law was
obtained from interviews and secondary sources, rather than independent
review and analysis.

We received comments from the Departments of State and Defense and
USAID. The Department of Defense and USAID generally agreed with our
report and offered technical comments that have been incorporated in the
report as appropriate. State disagreed with our description of the human
rights situation in the months following the September elections and the
potential impact of the elections on Bosnia’s democratic development. We
address State’s comments in these two areas in chapter 3. Comments
received from Defense, USAID, and State are reprinted in appendixes VI
through VIII, respectively.




Page 34                                GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 2

Progress in Providing a Secure Environment


                        To promote a permanent reconciliation between all parties, the Dayton
                        Agreement sought to establish “lasting security” based on a durable
                        cessation of hostilities,18 a stable military balance in the region, and
                        civilian police that operate in accordance with democratic policing
                        standards. The U.S. government believes that there are two key elements
                        of a stable military balance: arms control efforts called for by the
                        agreement and the program for training and equipping the Federation
                        military that was established outside of the Dayton framework. Some
                        progress has been made toward achieving the goal of a secure
                        environment. The parties observed the cease-fire, separated their forces,
                        and have largely completed the reduction of their militaries to
                        agreed-upon force levels. Moreover, the U.S.-led program to train, equip,
                        and integrate the Federation military is making progress, although
                        somewhat slower than expected.

                        Despite this progress, however, the parties have failed to fully comply with
                        measures designed to achieve lasting security. Republika Srpska has failed
                        to live up to its agreement to reduce its arms to the lowest numbers
                        consistent with its security needs.

                        Furthermore, Bosniak and Bosnian Croat political leaders have made
                        limited progress in reforming their civilian law enforcement agencies in
                        accordance with democratic policing standards, and Bosnian Serb political
                        leaders have not yet started reforming their police force. Recognizing that
                        the security situation warranted a continued international military
                        presence, in December 1996 NATO authorized another military mission,
                        SFOR, to stabilize and consolidate the peace in Bosnia.



                        Under IFOR monitoring and supervision, Bosnia’s three militaries have
Cease-Fire Has Held,    observed the October 1995 cease-fire; withdrawn their forces from
Weapons Were Put in     territories specified in the Dayton Agreement, including the zone of
Cantonment Sites, and   separation—an area generally 4 kilometers wide across the interentity
                        boundary line; placed their heavy weapons into IFOR-approved storage
Forces Were             sites and military installations where they are routinely monitored and
Demobilized             inspected by IFOR troops; and demobilized approximately 300,000 soldiers.
                        IFOR troops ensured the cease-fire and separation of the three militaries by
                        continuously patrolling throughout the country and by conducting routine
                        inspections of military facilities (see fig. 2.1).



                        18
                          The Dayton Agreement did not define “a durable cessation of hostilities.”



                        Page 35                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                                  Chapter 2
                                  Progress in Providing a Secure Environment




Figure 2.1: U.S. IFOR on Patrol




                                  Page 36                                      GAO/NSIAD-97-132 Bosnia Peace Operation
                     Chapter 2
                     Progress in Providing a Secure Environment




                     Because the fighting has not resumed, the operation’s civilian
                     organizations have been able to begin their work and the people of Bosnia
                     have started the long process of political and social reconciliation.
                     Officials of numerous civilian organizations in Bosnia told us that they
                     would not have been able to operate in Bosnia without the security
                     presence provided by IFOR.


                     The U.S. policy position is that a key element of establishing and
Military Train and   sustaining a secure environment in Bosnia is the program to train, equip,
Equip Program Is     and integrate the Bosniak and Bosnian Croat militaries into a unified
Progressing Slowly   Federation military. U.S. officials see this program as necessary to help
                     establish a stable military balance in the country and the region.19 The
                     program has progressed, but has been delayed somewhat by the time
                     required for Bosniak and Bosnian Croat political leaders to comply with
                     U.S. preconditions placed on the program. Congress held back 50 percent
                     of economic revitalization funding20 and the executive branch withheld
                     arms shipments until all foreign forces were withdrawn from Bosnia and
                     the Federation ended its military and intelligence relationships with Iran.
                     In June 1996, the President certified that this had occurred.21

                     Also, the United States would not begin the program until a defense law
                     passed the Federation assembly. The law was passed on July 9, 1996. It
                     created an integrated Ministry of Defense and joint high command and
                     requires the Bosniak and Bosnian Croat militaries to be fully integrated
                     into a unified Federation military by August 1999. The United States
                     further delayed the delivery of heavy weapons until the Federation’s
                     Minister and Deputy Minister of Defense were replaced. The Defense
                     Minister, a Bosnian Croat, was viewed as obstructing progress in
                     integrating the ministry. The Deputy Defense Minister, a Bosniak, had
                     unacceptable ties to the Iranian government. The Minister resigned, the
                     Deputy Minister was removed, and the heavy weapons were delivered in
                     mid-November 1996.


                     19
                      State Department officials stated that the specific weaponry provided under the program would
                     contribute to a stable military balance and would be within the limits of the arms control agreement
                     negotiated under annex 1B, article IV, of the Dayton Agreement. This provision called for negotiations
                     on arms control measures for Bosnia’s three militaries and those of Croatia and the Federal Republic
                     of Yugoslavia (Serbia and Montenegro).
                     20
                       The Dayton Agreement required the removal of all foreign fighters from Bosnia. Congress linked the
                     fulfillment of this requirement to economic revitalization funds in Public Law 104-122.
                     21
                      According to IFOR and U.S. government officials, a number of foreign fighters remained in Bosnia as
                     of December 1996, but they had acquired Bosnian citizenship and were not actively engaged in any
                     military activities in conjunction with the Bosnian government.



                     Page 37                                               GAO/NSIAD-97-132 Bosnia Peace Operation
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Progress in Providing a Secure Environment




According to a State Department official, implementation of the program
has also been affected by the continuing European Union embargo on
arms shipments to the former Yugoslavia. Because of this embargo, the
Federation has been unable to purchase equipment from current European
Union members and eastern European countries that aspire to join the
union.

As of March 31, 1997, 14 countries had pledged at least $376.24 million in
cash, equipment, training, and technical support for the program for the
Federation military, including about $103 million worth of equipment,
training, transportation support, and other services contributed by the U.S.
government to Bosnia.22 As part of a Federation contract with a U.S. firm,
three brigades were being trained in Bosnia with U.S.-supplied light
weapons, and a training school and computer simulation center for
command and staff training had been opened. According to State
Department officials, progress in implementing this program has required
heavy pressure from the United States. (See app. II for further information
on the train and equip program.)

In August 1996, according to a State Department official, the United States
offered training under the program to the Bosnian Serb army, if the
Bosnian Serb political leaders and military would participate in the
integrated Ministry of Defense and joint command structure called for in
the Federation defense law. Bosnian Serb political leaders would also have
to comply with all areas of the Dayton Agreement, including arresting
indicted war criminals, guaranteeing freedom of movement, and following
through on arms control agreements. As of April 1997, they had not agreed
to participate in the program under these conditions.




22
 According to State Department officials, many donors did not place a monetary value on in-kind
assistance.



Page 38                                              GAO/NSIAD-97-132 Bosnia Peace Operation
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                        Progress in Providing a Secure Environment




                        The international community and political leaders of Bosnia’s three major
Bosnian Serbs Have      ethnic groups have negotiated and begun to implement two of the three
Not Complied With All   arms verification and control agreements called for by annex 1B, articles
Arms Control            II, IV, and V, of the Dayton Agreement.23 These political leaders signed the
                        first agreement, the article II agreement, in January 1996 and fulfilled its
Agreements              first-year objectives,24 which were to (1) declare their holdings of heavy
                        weapons, (2) complete scheduled inspections of those holdings under OSCE
                        auspices, and (3) exchange military liaisons and other communications
                        links. As called for by annex 1B, article IV, the political leaders of all three
                        ethnic groups joined the Federal Republic of Yugoslavia and Croatia in a
                        second agreement25 that (1) established voluntary military manpower
                        limits, (2) set mandatory ceilings on heavy weapons significantly below
                        their declared current holdings, (3) instituted an additional round of
                        inspections of all five signatories’ heavy weapons holdings, and (4) set
                        timetables for the disposal of their surplus heavy weapons.26 According to
                        OSCE, the parties carried out all of the first agreement’s inspections and 74
                        of the 96 inspections called for by the second agreement for 1996.
                        However, only three of those not carried out were rescheduled.

                        Under the second agreement, the article IV agreement, Bosnian Serb
                        political leaders have not complied in two areas, according to U.S. and
                        OSCE officials. First, they seriously underreported holdings of heavy
                        weapons.27 Second, according to these officials, they circumvented the
                        agreement by exempting about 1,250 surplus weapons from disposal.
                        Because of these two factors, the Bosnian Serb army disposed of only 45
                        heavy weapons rather than the required percentages by December 31,
                        1996.



                        23
                          The two agreements defined five major categories of heavy weapons to be declared and subject to
                        limitations: (1) battle tanks, (2) armored combat vehicles, (3) combat aircraft, (4) combat helicopters,
                        and (5) artillery with a caliber of 75 millimeters and above. The first agreement also included a
                        category for antitank guided missile launchers mounted on armored vehicles.
                        24
                         Negotiations conducted under annex 1B, article II, of the Dayton Agreement resulted in the
                        “Agreement on Confidence- and Security-Building Measures in Bosnia and Herzegovina,” signed on
                        January 26, 1996 .
                        25
                         Negotiations conducted under annex 1B, article IV, of the Dayton Agreement resulted in the
                        “Agreement on Sub-Regional Arms Control,” signed on June 16, 1996.
                        26
                          The agreement required the parties to reduce their surplus heavy weapons by set
                        percentages—40 percent of surplus artillery, combat aircraft, and combat helicopters, as well as
                        20 percent of surplus tanks and armored combat vehicles—by December 31, 1996. The parties agreed
                        to dispose of the rest of their surpluses no later than November 1, 1997.
                        27
                         Republika Srpska declared a total of about 2,161 heavy weapons as part of its holdings. U.S. officials
                        estimated that Republika Srpska failed to declare between 1,700 and 2,000 of its heavy weapons.



                        Page 39                                                GAO/NSIAD-97-132 Bosnia Peace Operation
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                     Progress in Providing a Secure Environment




                     In response to pressure from the Peace Implementation Council, on
                     February 26, 1997, Bosnian Serb political leaders agreed to dispose of
                     about an additional 1,100 heavy weapons by November 1, 1997. However,
                     according to a State Department official, to fully comply with the
                     agreement, the Bosnia Serb army would have to dispose of 2,200 to 2,300
                     heavy weapons in total. An OSCE official said that Bosnian Serb
                     noncompliance could undermine the Dayton Agreement’s goal of creating
                     a stable military balance in the region.28 According to a State Department
                     official, however, the United States could increase assistance under the
                     Federation train and equip program to provide a military balance if the
                     Bosnian Serbs do not comply with the arms control agreements.

                     Negotiations have not yet begun on a third agreement called for by annex
                     1B, article V, to establish a regional arms control balance in and around
                     the former Yugoslavia. OSCE has not yet named a special representative to
                     foster these negotiations as required by the Dayton Agreement. The
                     agreement placed no time limit on these negotiations, nor did it define the
                     geographic area subject to this agreement. According to a State
                     Department official, negotiations on the regional agreement will not begin
                     until Bosnian Serb political leaders comply with the second agreement.


                     Bosniak and Bosnian Croat political leaders have made limited progress
Little Progress in   and Bosnian Serb political leaders have made no progress in developing
Reforming Police     police forces that provide a safe and secure environment for all people in
Forces               their jurisdictions and that respect human rights. According to many
                     observers and human rights reports, Bosnia’s three ethnically-based police
                     forces, which are controlled by their respective political leaders, have
                     done little to provide personal security and uphold human rights of
                     citizens of outside their respective ethnic groups.

                     Instead, most human rights violations—by some estimates as high as
                     70 percent, according to a December 9, 1996, U.N. report—have been
                     committed by police. The State Department, the High Representative, the
                     OSCE, the Federation Ombudsman’s office, and a U.S.-based human rights
                     organization have all reported that Bosnia’s police forces in many
                     instances have not acted to protect people of other ethnic groups who still


                     28
                       While the Bosniak and Bosnian Croat militaries also underreported some of their holdings and did
                     not meet their interim disposal targets, U.S. and OSCE officials agreed that their failure to comply was
                     largely due to technical problems and was not an attempt to circumvent the agreement. As of
                     March 1997, the Bosniak and Bosnian Croat militaries had disposed of 728 of their heavy weapons, or
                     about 94 percent of the heavy weapons required by their interim disposal target, according to State
                     Department documents; they had yet to dispose of only 48 mortars to meet their target.



                     Page 40                                                GAO/NSIAD-97-132 Bosnia Peace Operation
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Progress in Providing a Secure Environment




live in their jurisdictions or who wish to travel or return to their homes
across ethnic lines. In November 1996, the three members of the
Federation Ombudsman’s office told us that based on the information
gathered from their casework, they believe that police are the greatest
violator of human rights in the Federation. For example, according to an
IPTF report, in one particularly egregious incident in February 1997 the
Bosnian Croat police beat and fired on a procession of several hundred
Bosniaks who had crossed into west Mostar to visit a cemetery. According
to a U.S. embassy official, the primary problem in reforming police is that
political leaders of all three ethnic groups lack the will to stop using police
as a means of furthering their political aims.

In 1996, IPTF started a process designed to restructure and train the three
police forces in accordance with democratic policing standards. On
April 25, 1996, Bosniak and Bosnian Croat political leaders agreed to
comply with IPTF restructuring plans and democratic policing standards
and to integrate their separate police forces into a unified Federation
police force.29 The agreement called for Federation police restructuring
and integration to be completed by September 1, 1996. According to a U.N.
report, these efforts did not meet expected timetables because of political
disputes between Bosniak and Bosnian Croat political leaders.

As of March 1997, Bosnian Serb political leaders had not started to
restructure the Bosnian Serb police force in accordance with IPTF
democratic policing standards, although in early December 1996 they
agreed to submit a restructuring plan to IPTF by the end of January 1997.
According to a State Department official, the Bosnian Serb plan finally
submitted in February 1997 did not comply with IPTF’s democratic policing
standards. Specifically, it did not include screening police for human rights
offenders or identifying individual members of the police force.30

According to many officials and other observers with whom we spoke,
during its first year, IPTF did not have the mandate, authority or resources
to take effective action against human rights offenders on police forces. In
December 1996, the Peace Implementation Council and U.N. Security


29
  Specifically, they agreed to review police functions and reduce the size of their forces to bring them
closer to European standards, to screen all police for human rights abuses, to test all police to ensure
they have the requisite skills, and to overhaul police policies and procedures to promote service to the
community rather than service to the state.
30
  IPTF, in conjunction with the United States, designed and solicited contributions for a program to
train and equip police forces as a way of assisting police restructuring. The program’s implementation
was slowed by delays in restructuring the Federation and Republika Srpska police and lack of support
from donor countries other than the United States.



Page 41                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                         Chapter 2
                         Progress in Providing a Secure Environment




                         Council, with the parties’ agreement, attempted to correct this situation by
                         giving IPTF the authority to investigate human rights abuses by civilian
                         police forces and to propose sanctions against offenders. However, in
                         early December 1996 neither the Peace Implementation Council nor other
                         U.N. contributors agreed to provide the 300 additional police monitors
                         requested by the IPTF Commissioner to perform these investigations.

                         According to a State Department official, the United Nations was
                         encouraged to recruit monitors having specific investigative skills for this
                         purpose while staying within its current ceiling of 1,721. Later that month,
                         the U.N. Secretary General reported that if IPTF needed additional monitors
                         to exercise its new authority, he would submit proposals in this regard to
                         the Security Council. The IPTF leadership determined that it needed an
                         additional 120 monitors to perform its mandate effectively. In early
                         March 1997, the Secretary General asked the Security Council to consider
                         authorizing an increase in the number of IPTF personnel by 120 so that IPTF
                         could do human rights investigations while continuing its police
                         monitoring, restructuring, and training functions.31 As of April 21, 1997, the
                         Security Council had not acted on this request.


                         In December 1996, western observers in Bosnia told us that absent an
SFOR Established to      international military force, the conflict would likely resume.32 They noted
Address Need for a       persistent, low-level violations of the military requirements by the three
Continued                militaries, an accelerated pace of the destruction of housing for returnees
                         of other ethnic groups, and organized confrontations between ethnic
International Military   groups during attempts to resettle displaced persons in the zone of
Force                    separation that prompted IFOR intervention. Many of these observers said
                         that some sort of international military force would be needed for many
                         years to deter an outbreak of hostilities while Bosnia continues the
                         process of political and social reconciliation. They based this projection
                         on their assessments of the current pace of political and social change in
                         Bosnia, which we describe in the following three chapters of this report.

                         Recognizing the need for a continued international military force, in
                         December 1996 the North Atlantic Council authorized a new mission, SFOR,
                         which is about half the size of IFOR. The mission of SFOR is to continue to


                         31
                          The report also asked that the Security Council authorize another 186 police monitors and 11 civilian
                         personnel for deployment to Brcko. The Security Council authorized the increase in personnel for
                         Brcko on March 31, 1996.
                         32
                           Estimates of the length of time necessary for the militaries to resume the conflict after the
                         international force withdraws range from days to months.



                         Page 42                                                 GAO/NSIAD-97-132 Bosnia Peace Operation
    Chapter 2
    Progress in Providing a Secure Environment




    stabilize the situation in Bosnia, deter renewed hostilities, and consolidate
    the peace. According to the SFOR operation plan approved by NATO in
    mid-December 1996, the desired NATO end state is an environment
    adequately secure for the “continued consolidation of the peace” without
    further need for NATO-led military forces in Bosnia. The plan lists four
    conditions that must be met for the desired end state objective to be
    realized:

•   The political leaders of Bosnia’s three ethnic groups must demonstrate a
    commitment to continue negotiations as the means to resolve political and
    military differences;
•   Bosnia’s established civil structures must be sufficiently mature to assume
    responsibilities for ensuring compliance with the Dayton Agreement;
•   The political leaders of Bosnia’s three ethnic groups must adhere on a
    sustained basis to the military requirements of the Dayton Agreement,
    including the virtual absence of violations or unauthorized military
    activities; and
•   Conditions must be established for the safe continuation of ongoing
    nation-building activities.

    The operation plan asserts that these objectives will be achieved by
    June 1998. However, the plan does not provide information on how the
    civil-related objectives are to be achieved. The plan bases this time frame
    on the assumption that the international community will develop a
    political framework and civil implementation strategy for 1997 and 1998
    that will increase the emphasis on efforts of the operation’s civilian
    organizations and Bosnia’s political leaders to consolidate the peace.

    The executive branch has repeatedly stated that it plans to withdraw U.S.
    troops when the current mission ends in June 1998. Some State and
    Defense Department officials said, however, that based on current
    conditions, they believe some type of international military force will
    likely be required after SFOR’s mission ends.




    Page 43                                      GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 3

Progress in Developing a Unified,
Democratic Bosnia

                        As previously discussed, a principal objective of IFOR, and later SFOR, was
                        to create and maintain a secure environment with an absence of war
                        where political reconciliation could occur. A second principal objective of
                        the Dayton Agreement was to establish Bosnia as a unified, democratic
                        state that would uphold the rule of law and adhere to international
                        standards of human rights. In early 1997, Bosnia was far from achieving
                        this goal, due to continuing tension, distrust, and political discord among
                        Bosnia’s three major ethnic groups.

                        Under strong international pressure, the political leadership from all three
                        ethnic groups have taken some steps to link the country’s ethnic groups
                        politically through the creation of national and entity-level governmental
                        institutions,33 but leaders and the majority of people in two of the three
                        ethnic groups still want to live in ethnically pure states separate from
                        Bosnia. The September 1996 elections that began the development of these
                        institutions were intended to be a step in the progressive achievement of
                        democratic goals throughout Bosnia; however, they were not held in a
                        fully free and fair environment, and international observers and executive
                        branch analyses reported that they may have even hampered Bosnia’s
                        democratic development. In the months following the elections, the
                        human rights situation worsened, particularly in Bosnian Serb-controlled
                        areas, and ethnic intolerance remained strong. As of March 1997, political
                        leaders from two of the three Bosnian ethnic groups still had not begun
                        cooperating with the International Criminal Tribunal for the Former
                        Yugoslavia (referred to as the “war crimes tribunal”) in its prosecution of
                        war crimes and other violations of international humanitarian law even
                        though the political leadership of all three ethnic groups had agreed to do
                        so.


                        Progress toward creation of a genuinely unified Bosnia is not
Building Institutions   self-sustaining and depends heavily on the willingness of the political
Under Way, but Some     leadership from all three ethnic groups to cooperate as well as on
Ethnic Groups Still     continued international pressure and support, especially from the United
                        States. Since the September 1996 election of the multiethnic, national
Want Separate States    presidency and Parliamentary Assembly, elected Bosnian officials from all
                        three ethnic groups have begun to build a national government. Table 3.1
                        shows a list of national institutions and their status as of March 1, 1997.



                        33
                          Bosnia’s constitution gives the national government authority in 10 specific areas, excluding armed
                        forces. All governmental functions not specifically granted to the national level are devolved to the
                        entities.



                        Page 44                                               GAO/NSIAD-97-132 Bosnia Peace Operation
                                          Chapter 3
                                          Progress in Developing a Unified,
                                          Democratic Bosnia




Table 3.1: Progress in Creating National Institutions
Institution                                  Function under Dayton                           Status as of March 1997
Parliamentary Assembly                     Enact national legislation to implement   Met once; passed no legislation.
                                           decisions of the presidency, make revenue
                                           decisions, approve national budget, and
                                           ratify treaties.
Presidency                                 Act as executive of national government           Met 15 times since October 1996, with
                                                                                             representatives from all 3 ethnic groups
                                                                                             meeting to establish national, multiethnic
                                                                                             governing institutions; reached several
                                                                                             agreements.
Council of Ministers                       Implement policies and decisions of               Co-chairs, vice-chair, ministers, and deputy
                                           national government                               ministers selected. Met 10 times since
                                                                                             initial January 1997 meeting. Ministries still
                                                                                             had no staff, funding, office space, or
                                                                                             effective authority.
Standing Committee on Military Mattersa    Coordinate military matters at national level. Has never met.
Constitutional court                       Highest appellate court; resolve disputes         International and Bosniak members
                                           over constitution and between entities.           appointed; Bosnian Serb and Croat
                                                                                             members not appointed; court has never
                                                                                             met.
Central bank                               Issue currency and conduct monetary               Members selected but could not agree on
                                           policy                                            bank’s role; separate currencies continue
                                                                                             to be used in Bosnia’s Serb, Croat, and
                                                                                             Bosniak areas.
                                          a
                                           Bosnia’s Serbs, Croats, and Bosniaks still maintain three separate armed forces, a condition that
                                          must evolve into a unified armed forces, according to a State Department official, if Bosnia is to
                                          become a unified country. As an interim measure, the Dayton Agreement calls for members of the
                                          collective presidency to select representatives for a standing committee on military matters that
                                          would coordinate the activities of the armed forces.



                                          Under significant pressure from the international community, Bosnian
                                          officials from all three ethnic groups have taken steps to build national
                                          and entity institutions that link Bosnia’s ethnic groups politically.
                                          However, Bosnia is still a long way from having a functioning national
                                          government because ethnic political leaders continue to disagree first on
                                          the requirements of the Dayton Agreement and, second, on the scope, size,
                                          and authority of the national institutions.

                                          According to various international observers, Bosnian Serbs very narrowly
                                          interpret the national institution-building requirements in the agreement
                                          because they want a small, weak national government. The Bosniaks on
                                          the other hand, believe the agreement calls for a stronger, more robust
                                          central government. This fundamental disagreement has slowed the
                                          process of starting national institutions. For example, final agreement on



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the number of ministries in the national government was delayed because
Bosnian Serb political leaders wanted to create only the two ministries
specifically mentioned in Bosnia’s constitution, whereas Bosniak political
leaders wanted a larger national government with additional ministries.
Also, Bosnian Serb political leaders continue to insist on using a different
currency in Republika Srpska than in the Federation and have blocked
efforts to establish a common central bank.

Although the Federation between Bosniaks and Bosnian Croats was
established in March 1994, Bosniak and Bosnian Croat leaders have made
only limited progress toward creation of the joint Bosniak-Croat
Federation—this despite pressure from the United States and others. For
example, the complete Federation House of Representatives has met only
twice since its election in September. Bosnian Croat members boycotted
the third meeting partly because they could not reach agreement with
Bosniak members on redrawing the Federation’s municipality boundaries;
the Bosnian Croats sought to redraw the boundaries to create additional
ethnically pure municipalities. Also, from 1994 through the end of 1996,
the European Union implemented a program that attempted to politically
integrate the divided city of Mostar. This effort did not succeed because
the Bosnian Croats want to remain separate from the Bosniaks, and
Bosnian Croat actions taken during the period tended to undermine the
development of a unified city government.

According to international observers in Bosnia, as of December 1996 real
governmental power and authority in the Federation continued to reside in
separate Bosniak and Bosnian Croat governmental structures, despite
three formal announcements in 1996 that they had been abolished. Some
of these observers also noted that Bosnian Croat authorities in late 1996
seemed to be hardening their position with regard to not cooperating with
Federation institutions. Efforts to build a viable Federation were further
undermined by the violence in Mostar in February 1997.34

After 1 year of implementing the Dayton Agreement, the three Bosnian
ethnic groups continued to hold differing views on whether a unified
Bosnia should exist. Although the political leaders for all three groups
maintain publicly that they support the goals of a unified Bosnia,
according to a December 1996 U.N. report some nationalist leaders of

34
  On February 10, 1997, a group of uniformed and plainclothes Bosnian Croat police attacked an
unarmed group of several hundred Bosniaks attempting to visit a cemetery as part of a religious
holiday, killing 1 and wounding at least 20 Bosniaks. This attack triggered violence between Bosniak
and Bosnian Croats throughout Mostar, including two attacks on SFOR vehicles. According to DOD, it
is suspected that Bosnian Croats attacked the SFOR vehicles in both instances.



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                       Republika Srpska, as well as some Bosnian Croat leaders, have continued
                       to advocate the complete separation of their territories from Bosnia. In
                       January 1997, the State Department reported that Bosnian Serb and
                       Bosnian Croat political leaders still retained their commitment to the
                       concepts of a “greater Serbia” and a “greater Croatia,” after having agreed
                       in the Dayton accords to abandon them.

                       According to polls conducted by USIA in December 1996 through
                       January 1997, the political leaders’ views are shared by their ethnic groups.
                       While the majority of all three ethnic groups said they favor Dayton
                       Agreement goals and view the agreement as better than war, 79 percent of
                       Bosnian Croats and 94 percent of Bosnian Serbs think the areas under
                       their control should be part of Croatia and Serbia, respectively. In
                       contrast, 99 percent of Bosniaks support a unified Bosnia, with two-thirds
                       believing a unified Bosnia is worth dying for.35


                       In June 1996, the OSCE Chairman-in-Office announced that while conditions
Elections Were Held,   were not suitable to hold the national, entity, and other elections
but Were Considered    scheduled for September 14, 1996, they should be held. In this statement,
Not Fully Free and     the Chairman-in-Office noted serious problems with the political and
                       human rights climate.36 On election day, less than 1 year after the
Fair                   cessation of hostilities, voter turnout was high, the security situation was
                       generally calm throughout Bosnia despite concerns about the potential for
                       violence,37 and voters were able to vote for the candidates of their choice.

                       However, the report of the OSCE Coordinator for International Monitoring
                       stated that the ability of all Bosnian political parties to (1) campaign in a
                       free and fair atmosphere, (2) receive equal treatment before the law, and
                       (3) obtain unimpeded access to the media was below the minimum OSCE
                       standard. During the campaign, the three ethnically based political parties
                       that have ruled since Bosnia’s 1990 election—the Bosniak Party of
                       Democratic Action (SDA), the Serb Democratic Party (SDS), and the
                       Croatian Democratic Union (HDZ)—harassed and intimidated opposition

                       35
                        USIA data shows results for “Bosnian Muslims”, not Bosniaks. For the purposes of this report, we
                       have used the terms synonymously.
                       36
                         The Dayton Agreement required OSCE to conduct elections for national and entity-level positions no
                       later than September 1996. OSCE could also conduct cantonal and municipal-level elections during
                       this time frame, if feasible. On August 27, 1996, OSCE announced it would postpone the municipal
                       elections because of serious distortions in the use of the rule that allowed people to vote where they
                       intended to live. As of March 1997, OSCE planned to hold municipal elections in September 1997.
                       37
                         Many observers attributed the lack of violence on election day to the postponement of municipal
                       elections.



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parties. Moreover, the three ruling political parties generally controlled the
media during the campaign and used this control to propagate fear and
insecurity among voters.

Although SDA allowed a greater degree of media freedom than SDS or HDZ,
opposition parties in general had a very difficult time campaigning through
television, radio, or print media.38 State Department officials
acknowledged that the elections were not conducted in a fully free and
fair atmosphere. However, they believed that the results accurately
represented the will of the people.

The impact of the elections on Bosnia’s progress toward becoming a
democratic nation is unclear. With some exceptions in Republika Srpska,
the three ruling political parties won overwhelmingly because, according
to USAID and human rights documents, Bosnians believed that only the
ruling political parties could protect their respective interests in light of
the threat of renewed conflict and the fear instilled by the parties. (See
app. III for election results.)

Many observers told us that the elections, while not conducted in a fully
free and fair environment, turned out as well as could be expected less
than 1 year after the war. In their view, the elections were the first step in
a democratization process, culminating in the Bosnian national elections
planned for 1998. In addition, the election process helped create an active
political opposition which could set the stage for later political changes in
Bosnia. Further, although the ruling political parties were the major
winners on election day, opposition candidates, particularly in Republika
Srpska, did somewhat better than expected. A Bosnian Serb opposition
candidate told us that before he started campaigning, he was supported by
3 percent of the population, but ended up getting 30 percent of the vote. A
Bosnian Croat opposition candidate reported that receiving 10 percent of
the vote almost constituted a victory, relative to the 7 percent he would
have been satisfied with.

However, according to various reports, the election results may have had
some negative effect on democratic progress in Bosnia. According to
international observers and a USAID strategy document for promoting
democratic reforms in Bosnia, the election results decreased, rather than
strengthened, the probability that reconciliation and political tolerance

38
 The Open Broadcast Network—an effort by the international community to establish an alternative
media source for opposition parties—began operation only 1 week before the election due to the late
arrival of equipment and unwillingness of some of the ethnic political leaders to allow it to operate.
State Department and USAID officials said its impact on the election was minimal.



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                      would occur because they kept in power authoritarian leaders and
                      political parties that control the media and the flow of information. State
                      Department and USAID officials told us that while these victories may
                      hinder efforts to build a democratic state, no one was surprised that the
                      ruling political parties won by such wide margins. However, State’s official
                      position is that despite its flaws, the September 1996 election was an
                      essential first step in the long-term process of creating democratic
                      institutions in Bosnia.


                      According to human rights observers and their reports, the overall human
Human Rights          rights situation deteriorated in the months after the September 1996
Situation Worsened,   election, particularly in Republika Srpska, as the ruling parties worked to
and Ethnic            consolidate their power. For example, OSCE human rights reports noted
                      increasing numbers of bombings and arson attacks, and evictions directed
Intolerance Was       at ethnic minorities throughout the country; intensified repression of the
Strong After the      opposition press and political parties, including evictions aimed at
                      opposition party members in Republika Srpska; and the destruction of 95
Election              Bosniak houses in Prijedor, Republika Srpska, over a several-hour period
                      in late October 1996. These human rights reports noted a continuing
                      deteriorating human rights situation throughout Bosnia, but particularly in
                      Republika Srpska, through December 1996 at the time we completed our
                      fieldwork in Bosnia.

                      In addition, Bosnians of all three ethnic groups could not travel freely
                      across ethnic boundaries in many areas of the country, even though many
                      physical barriers to freedom of movement have been removed and IFOR
                      data show that large numbers of vehicles cross the interentity boundary
                      line. According to human rights reports, much of the population could not
                      freely cross ethnic lines at will or remain behind ethnic lines to visit, work,
                      or live without facing harassment, intimidation, or arrest by police of other
                      ethnic groups. A December 1996 NATO document stated that IFOR suspected
                      all three ethnic groups of continuing to use mobile, fast-moving
                      checkpoints to hinder freedom of movement.

                      In December 1996, the United Nations reported that the police throughout
                      Bosnia were responsible for most human rights violations—by some
                      estimates as much as 70 percent. To help address this critical issue, the
                      Peace Implementation Council, at its December 1996 London conference,
                      imposed new responsibilities on the United Nation’s IPTF to, among other
                      things, investigate human rights abuses by police. An additional 120 IPTF




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monitors, with investigative skills, were requested in March 1997 for this
purpose.

According to USIA polls and international observers, ethnic animosity and
intolerance in Bosnia have remained strong. For example, according to a
January 1997 poll, 92 percent of Bosnian Serbs had an unfavorable opinion
of Bosniaks and 76 percent had an unfavorable view of Bosnian Croats.
Bosnian Serbs were viewed unfavorably in return by 70 percent or more of
the other two groups. Relations between Bosniaks and Bosnian Croats
actually grew worse through 1996. While in December 1995 over
40 percent of Bosnian Croats viewed Bosniaks favorably, by January 1997
85 percent viewed Bosniaks unfavorably. During the same period, the
percentage of Bosniaks who viewed Bosnian Croats favorably fell from
72 percent to 42 percent.

In February 1997, the Archbishop of Sarajevo said that Bosnians hold
these views because their political leaders control and use the media to
encourage animosity and discourage reconciliation among the ethnic
groups. Moreover, according to international observers, the bitter
memories from the recent war contribute to the strong ethnic
animosities—people remember who killed their family members or forced
them from their homes.

On April 14, 1997, the High Representative reported that a precarious
human rights situation, characterized by widespread discrimination and
abuse on ethnic grounds, continues to reign in Bosnia. The High
Representative reported continued harassment of minorities residing,
visiting, or travelling through areas where another group is in the majority,
with the most severe abuses occurring in the Republika Srpska and in
Bosnian Croat-controlled areas. The report also noted a worrying
development during the reporting period—tit-for-tat attacks on religious
and cultural edifices, such as churches, mosques, and cemeteries, within
the Federation.

According to a State Department document, the international community
must engage in a long-term democratization effort to counter the
continued presence of separatists and unreconstructed, authoritarian
centralists in Bosnia. By late 1996, many international aid donors,
including USAID, USIA, and OSCE, had already started democratization
projects designed to foster ethnic tolerance and reconciliation within and
across the two entities and to develop alternative media outlets and




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                      political, social, cultural, and business organizations. See appendix V for
                      descriptions of USAID and USIA democracy programs in Bosnia.


                      The Dayton Agreement calls for all parties—including Bosnia’s Serb,
Leadership of Two     Croat, and Bosniak authorities—to cooperate with the War Crimes
Ethnic Groups Have    Tribunal, which includes arresting people indicted for war crimes and
Not Cooperated With   surrendering them to the war crimes tribunal; however, as of April 25,
                      1997, only 8 of the 74 people39 indicted for war crimes had been arrested
the War Crimes        and brought to the tribunal. While the Bosniak authorities arrested all
Tribunal              indicted persons who were in Bosniak-controlled areas, the Bosnian Serbs
                      and Bosnian Croats did not arrest people indicted for war crimes in their
                      areas of control.

                      The international community made some attempts to politically isolate
                      and remove from power the most prominent Bosnian Serbs indicted by the
                      war crimes tribunal. Under pressure from OSCE and the international
                      community, Radovan Karadzic40 stepped down as the head of the SDS on
                      July 18, 1996. According to international observers, however, the
                      international community’s efforts to remove him from power did not work;
                      instead, he has effectively retained his control and grown in popularity
                      among people in Republika Srpska (see fig. 3.1). USIA polls showed that
                      between April 1996 and January 1997, the percentage of Bosnian Serbs
                      who viewed Karadzic very favorably increased from 31 percent to
                      56 percent, and the percentage who viewed him somewhat favorably or
                      very favorably rose from 68 percent to 85 percent.




                      39
                        These figures do not include one person who was indicted by and surrendered to the war crimes
                      tribunal, but who was released by the tribunal for humanitarian reasons and later died.
                      40
                       Radovan Karadzic was indicted on charges of violating the laws of war, crimes against humanity, and
                      genocide by the war crimes tribunal.



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Figure 3.1: Karadzic-SDS Campaign Poster Over OSCE Office in Doboj (July 28, 1996)




                                          According to State Department officials and documents, until indicted war
                                          criminals are arrested and turned over to the tribunal, it will be impossible
                                          to establish a stable peace in the region. Human rights reports also support
                                          this conclusion; according to some reports, indicted war criminals control
                                          the economy and governmental institutions in many places in Bosnia.
                                          Further, according to an expert on Bosnian culture, reconciliation among
                                          Bosnians cannot take place until war criminals are brought to justice and
                                          held accountable for their actions.



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                     The State Department has indicated, however, that countries participating
                     in the Bosnia peace operation are divided over how to resolve the issue of
                     noncompliance with the war crimes tribunal. While some countries,
                     including the United States, would support an active strategy for the arrest
                     of war criminals, other countries would not do so.


                     State specifically disagreed with two issues discussed in this chapter:
Agency Comments      (1) that the human rights situation had worsened in the months following
and Our Evaluation   the September 1996 elections; and (2) that the elections may have had the
                     effect of hindering the process of democratic development in Bosnia.
                     According to State, it is “categorically untrue” that the human rights
                     situation had worsened, or that the elections may have had any long-term
                     negative effect on the pursuit of democracy in Bosnia. Despite reports to
                     the contrary, to which State gave little weight, State said the human rights
                     situation had improved, and that the elections represent an “unqualified
                     validation” of the work of the international community. State said that
                     although the September 1996 elections kept in power leaders from the
                     nationalist parties, they were a necessary prerequisite for Bosnia’s
                     democratic development.

                     Our discussion of the human rights situation in the months following the
                     election is based on an analysis of information contained in biweekly
                     reports submitted by on-the-ground observers from an internationally
                     recognized organization. These reports described a continuing
                     deteriorating human rights situation in many parts of Bosnia in the months
                     following the elections. This was particularly true, but not exclusively so,
                     in Republika Srpska. Moreover, the international community itself, in late
                     1996 and early 1997, recognized the seriousness of human rights abuses in
                     Bosnia when it sought an expanded mandate and an 120 additional
                     monitors for IPTF specifically to investigate allegations of abuses by
                     members of Bosnia’s police forces.

                     We acknowledge that the September 1996 elections may have been a
                     necessary first step in the process of democratic development in Bosnia
                     and that opposition parties did better than expected in the election. We
                     also agree that it was no surprise that the ruling parties won by such wide
                     margins, particularly given the fact that the ruling parties controlled the
                     media, making it difficult for opposition parties to campaign. Moreover,
                     we recognize State’s position that the elections were an essential first step
                     in the long-term process of developing democratic institutions in Bosnia.
                     However, we believe it is equally important to note the potential negative



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aspects of the elections. As State itself acknowledged, the election
resulted in legitimizing and keeping in power the authoritarian political
leaders who brought civil war and atrocities to Bosnia. These leaders have
continued to resist working cooperatively to achieve the goals of the
Dayton Agreement in many critical areas, including the development of
democratic policing; the return of refugees, particularly cross-ethnic
returns; the implementation of smooth functioning national government
institutions; and economic integration across entity boundaries and within
the Federation.




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Progress in Rebuilding Bosnia’s Economy


                         The Dayton Agreement’s goals for the economy of Bosnia and Herzegovina
                         include economic reconstruction, building national government and
                         Federation economic institutions, and promoting a market economy. To
                         support these goals, the government of Bosnia, with the assistance of the
                         World Bank, the European Commission, the European Bank for
                         Reconstruction and Development, and other international agencies and
                         organizations, designed the 3- to 4-year, $5.1-billion Priority
                         Reconstruction Program. This program gave the international community
                         a framework for the economic reconstruction and integration of Bosnia. In
                         addition to supporting the Dayton Agreement’s goals, the program sought
                         to jump-start economic recovery, thereby creating visible results quickly
                         so that the people of Bosnia could experience an immediate betterment of
                         their lives and become stakeholders in creating conditions for an enduring
                         peace.

                         In 1996, 59 donor countries and organizations pledged $1.9 billion,
                         exceeding the program’s first-year pledging goal of $1.8 billion. By the end
                         of the year, there were many signs of economic recovery in the Federation.
                         Overall, however, economic activity was still at a very low level, much
                         reconstruction work remained to be done, and mass unemployment was
                         still a major concern. The biggest obstacle to progress has been the lack of
                         cooperation among Bosnia’s political leaders in implementing projects and
                         developing institutions that would economically link their respective
                         ethnic groups. Problems in donor coordination have also contributed to
                         delays in achieving results. At a December 1996 conference in London, the
                         international community stated that it would use economic assistance as a
                         tool to encourage compliance or discourage noncompliance with Dayton
                         goals in the areas of refugee return and freedom of movement.


                         Fifty-nine donors—48 countries and 11 organizations—exceeded the
Donors Exceeded          $1.8 billion goal of the December 1995 and April 1996 pledging
1996 Pledging Goal for   conferences, bringing the total international pledge for the 1996
the Reconstruction       reconstruction program to $1.9 billion.41 However, as of December 1996,
                         $2.03 billion, more than the amount pledged, had been committed to the
Program                  program. The U.S. government, primarily through USAID, committed
                         $294.4 million during the program’s first year for, among other things,
                         repair of municipal infrastructure and services, small business loans, and
                         technical assistance for the development of national and Federation
                         economic institutions. The United States as a donor was third behind the

                         41
                          Funding for the reconstruction program in subsequent years is to be raised at succeeding
                         conferences.



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                                                    European Commission’s $430.21 million and the World Bank’s
                                                    $357.8 million. European donors as a group committed 47.2 percent of the
                                                    committed funds and the United States committed 14.5 percent
                                                    (see fig. 4.1).



Figure 4.1: Donor Commitments to the Priority Reconstruction Program, as of December 1996 (Dollars in Millions)


                                                                          European donors $957.26
                                                              European donors  $957.26



                                                           47.2%



Islamic countries $159.46             7.9%                                 7.4%           Others $149.84
                                                   23.0%
                   $159.46                                         14.5%
                                                                                        Others   $149.84

                                                                                   United States $294.40
                                  $465.91
                                                                              United States   $294.40
                        International financial institutions $466.11



                                                    Source: Implementation of the Priority Reconstruction Program in 1996, prepared by the
                                                    European Commission and the Central Europe Department of the World Bank (Mar. 1997).




                                                    As of December 1996, nearly all of the $2.03 billion of the committed funds
                                                    had been designated for reconstruction activities, and $1.1 billion, or
                                                    54 percent of the total commitments had been disbursed,42 exceeding the
                                                    disbursement target of $950 million (about half of the pledged funding) set
                                                    in June 1996. A November 1996 donor report prepared by the European




                                                    42
                                                     World Bank data on funds that have been disbursed do not necessarily translate into results on the
                                                    ground. Hence, while $1.10 billion had been disbursed by December 1996, we cannot say what portion
                                                    of this represents physical results. That information is not currently available.



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                        Commission and the World Bank43 estimated the financing needs of the
                        program over the next 2 years to be $2.5 billion, of which the 1997
                        requirements represent $1.4 billion. Appendix IV provides more
                        information on the Priority Reconstruction Program.


                        Overall, economic activity remains at low levels throughout Bosnia,
Economic Activity       although there are visible signs of economic recovery. According to the
Remains at Low Level,   World Bank, by the end of 1996 industrial production, though recovering,
but Signs of Economic   was still only at 10 to 15 percent of its prewar level; half the labor force
                        remained unemployed, and wages in the Federation averaged little more
Recovery Now Visible    than $150 per month, for those who were working.44

                        According to the November 1996 donor report, economic conditions in the
                        Federation had improved since the war’s end, albeit from very low levels.
                        Bosniak-controlled areas of the Federation sustained the heaviest physical
                        damages from the war, and by year-end 1996 the Federation, as a whole,
                        had received $1.1 billion, or 81 percent, of the total assistance efforts
                        under implementation ($1.36 billion).45 In the Bosniak-controlled part of
                        the Federation, the World Bank estimated unemployment at 50-60 percent,
                        an improvement from the 90 percent unemployment at the end of the war.
                        Industrial output roughly doubled to 15-20 percent of its prewar levels, and
                        wages, for those who were working, had roughly quadrupled, to an
                        average of a little more than $100 per month. According to the World
                        Bank, during 1996 the Federation cash budget was balanced and prices
                        remained broadly stable. The November 1996 donor report indicated that
                        in the Bosnian Croat-controlled areas of the Federation, which suffered
                        less war damage than the Bosniak-controlled areas, industrial production
                        was running at 85 percent of its prewar level, and wages stood at more
                        than $200 per month.46

                        43
                          The Priority Reconstruction Program: From Emergency to Sustainability, prepared by the European
                        Commission, the European Bank for Reconstruction and Development, and the Central Europe
                        Department of the World Bank for the Donor Information Meeting, vols. 1, 2, and 3 (Nov. 1996),
                        hereafter referred to as the “November 1996 donor report.” The March 1997 status report to the donor
                        community, Implementation of the Priority Reconstruction Program in 1996, prepared by the
                        European Commission and the Central Europe Department of the World Bank (Mar. 1997), is referred
                        to as the “March 1997 donor report.”
                        44
                         According to several international financial institutions involved in the program, there are no reliable
                        end-of-war (1995) financial statistics, and reliable financial statistics are not yet available for Bosnia’s
                        1996 economic performance.
                        45
                          Funds under implementation are those firmly committed funds for which contracts have been
                        tendered, signed, or are under way (including amounts disbursed).
                        46
                         The report did not provide an end-of-war estimate of industrial production in Bosnian
                        Croat-controlled areas.



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Although Republika Srpska suffered less physical damage from the war,
the economic embargo47 had an adverse impact on industrial production.
At the end of 1996, industrial production was estimated to be at 8-10
percent of its prewar level, and unemployment was estimated to be over
60 percent. Because of international sanctions and donor governments’
policies, about 3.2 percent of the total assistance efforts under
implementation ($1.36 billion), or $43 million, was actually being
implemented in Republika Srpska in 1996. This included activities
primarily of an emergency nature. Growth in Republika Srpska during
1996 was close to zero.

The first results of the economic reconstruction program are now visible,
primarily in the Federation. For example, key transport linkages including
airports, roads, railways, and bridges have been restored. The Sarajevo
airport is now open to limited commercial traffic, and the tram system has
been restored to half its prewar capacity. Repairs and renovations have
been made to thousands of homes, including the reconnection of 32,000
apartments to the district heating system in Sarajevo before winter. Four
major transmission lines were restored, and three major thermal power
plants are being repaired. Basic services like water, electricity, and heating
have been or are being restored in many areas. Over $100 million in small-
and medium-sized business loans have helped revive commerce and have
generated an estimated 11,000 new jobs. According to the November 1996
donor report, an estimated 250,000 jobs were created at the peak of the
1996 reconstruction program.

Fiscal support has been provided to more than 10 government institutions,
including the Federation Customs, Tax, and Banking Supervision
Agencies, and economic institutions are beginning to emerge. The
Federation Customs Administration became operational in April 1996, and
revenues began flowing into the Federation from Bosnian
Croat-controlled, as well as Bosniak-controlled, areas, though not without
numerous delays and interruptions. The Federation Banking Agency
became operational in July 1996, following the passage of legislation in
June. The agency had issued more than 21 licenses to banks in the
Federation as of January 1997 and had begun to monitor all banks in the
Federation based on prudential standards.48 The Federation parliament

47
 On April 17, 1993, the United Nations Security Council adopted Resolution 820, which barred all trade
and financial transactions with the Serb-controlled areas of Bosnia. On February 27, 1996, economic
sanctions imposed upon the Republika Srpska were suspended by the Security Council in accordance
with Resolution 1022, and they were completely terminated in October 1996 by Resolution 1074.
48
 According to USAID officials, banks in both parts of the Federation are receiving licenses subject to
uniform bank licensing criteria using western norms.



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passed the tax administration law in August 1996, and it became effective
in October. At a meeting of the presidency on April 15, 1997, the three
parties agreed to establish a single central bank operating as a currency
board, as provided by Dayton, and to establish a single currency valid for
all transactions in Bosnia. (See app. IV for details on sectoral progress.)

In addition to the reconstruction work going on within the framework of
the Priority Reconstruction Program, other international efforts have
benefitted the economy. IFOR, in the conduct of its mission, carried out
substantial repairs to restore infrastructure, particularly in the area of
transport. The international community has also funded humanitarian
assistance projects that rehabilitated housing and micro-level
infrastructure. As of November 1996, UNHCR’s humanitarian housing
program had repaired 18,000 houses and apartments, benefiting over
90,000 people in both the Federation and Republika Srpska, and USAID’s
Emergency Shelter Program repaired over 2,500 homes in the Federation
as of November 1996 (see fig. 4.2). However, UNHCR indicated in a
November 1996 report that lack of housing remains a constraint to refugee
return.




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                                        Progress in Rebuilding Bosnia’s Economy




Figure 4.2: USAID-funded Housing and Bridge Repairs




                                        According to the November 1996 and March 1997 donor reports,
Lack of Parties’                        converting the reconstruction funds into actual results on the ground has
Cooperation and                         been slower than estimated. In many key sectors, this has been due to the
Problems in Donor                       reluctance of the three ethnic groups’ political leaders to cooperate in
                                        infrastructure projects and economic institutions that would link the
Coordination Hinder                     ethnic groups within the Federation and across the entities. In addition,
Progress                                the donor reports indicated that donor coordination problems have also
                                        contributed to delays in achieving results on the ground.


Lack of Cooperation From                The November 1996 donor report stated that there has been little
the Parties                             cooperation both within the Federation and between the entities in the
                                        major network sectors such as telecommunications, electric power, and
                                        transport, where projects frequently involve link-ups between the different
                                        ethnic groups. For example, connecting Bosnia’s Serb, Croat, and Bosniak




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areas by telephone has been held up by a three-sided insistence on
separate networks. Implementation of intra- and interentity electric power
projects has been stalled by a lack of cooperation among Bosnia’s three
electric power plant companies; each company is located in a different
area of ethnic control. Further, the regularity of railway operations has
been impeded by the lack of contact between the three railway companies
that now operate the 1,000 kilometers of lines. Though successful water
works projects were undertaken in 1996, in municipalities divided along
ethnic lines but served by a common water source there has been a
reluctance to cooperate.

Moreover, civilian landmine clearing, particularly critical to reconstruction
efforts and refugee return, has been slow to start. While progress has been
made in institution-building, training, and identification of minefields,
according to the March 1997 donor report, implementation of actual mine
clearing has been much slower than expected due to persistent
disagreements between the central and entity governments, among others,
on the sharing of responsibilities, and the lack of local capacity to do mine
clearing.49 Because of these problems, civilian mine clearing operations
did not start in Bosnia until the fall of 1996. In December 1996, a senior
IFOR officer told us that the political leaders of Bosnia’s three major ethnic
groups do not want to remove landmines—most of which are located in
strategic locations in the zone of separation—because they believe the
cease-fire is only a temporary cessation of hostilities. Further, according to
a December 1996 USAID report, the parties are continuing to lay landmines
in the zone of separation and other areas of Bosnia.

According to USAID officials, the main obstacles USAID has encountered in
implementing its municipal infrastructure program have involved freedom
of movement issues and noncompliance by municipal leaders who do not
support the principles and practices embodied in the Federation
constitution and the Dayton Agreement with respect to equal protection
and opportunity for all ethnic groups.

The lack of cooperation and differing views of the political leadership of
all three ethnic groups, fueled in part by differing opinions on whether a
unified Bosnia should exist, has limited progress in economic institution
building, stalling economic integration at the national government and

49
  Bosnian authorities disagreed with the initial donor mine clearing plan, which called for the use of
international firms to perform urgent mine clearing around infrastructure that was key to economic
recovery. Instead, they wanted to wait until there was a cadre of Bosnian firms that could clear mines
as a means of generating employment. Thus, demining efforts were unable to start until near the end of
1996.



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Federation level. As of late March 1997, the newly constituted central bank
had not yet met officially, awaiting the passage of a central bank law that
had yet to be enacted due to lack of agreement between the three parties
on the structure of the bank and the new currency.50

Political barriers, not technical obstacles, also have hindered the linking of
the payment systems in the Croat-, Bosniak-, and Serb-controlled areas of
Bosnia. For political reasons, business accounts are settled once a week
rather than daily, thus contributing to segmentation of Bosnia’s financial
system. The circulation of separate currencies in Bosnia’s Serb-, Croat-,
and Bosniak-controlled areas has also impeded the unification of the
payment systems. While the newly established Federation Customs
Administration has unified the trade and tariff regimes in Bosnian Croat-
and Bosniak-controlled areas of the Federation, and has begun integrating
customs staff of the two parts of the Federation, different trade and tariff
regimes continue to apply between the two entities.

According to U.S. Treasury officials, underlying tensions and continuing
distrust between the Bosnian Croat and Bosniak members of the
Federation, and between political leaders of all three ethnic groups, have
impeded progress in the areas in which the Treasury is providing technical
assistance. The resulting disagreements, delays, reluctance to change, and
logistical problems (hiring and paying Federation staff and acquiring office
space and computers), and the replacement of Ministry of Finance staff
with whom the Treasury had developed good working relations, have
obstructed the implementation of a fully functioning budget process and
threaten to halt the implementation of the unified Federation tax
administration, which has just begun.

A unified Federation tax administration is intended to merge the two
existing, separate tax administrations in Bosnian Croat- and
Bosniak-controlled areas and establish the enforcement and collection of
tax revenues, a prerequisite for running a government. The lack of a
functioning budget process impedes the development of the national
government, Federation, and cantonal budgets, which require agreement
concerning revenue sources and expenditure responsibility. As of
March 1997, the 1997 budgets for all three levels of government had not
been developed, and separate fiscal systems for the three
ethnically-controlled areas of Bosnia continued to operate, each with its



50
 The Central Bank Law was still awaiting passage as of April 22, 1997, even though the Presidency
agreed to a single central bank and single currency on April 15, 1997.



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                    own tax policy. Political tensions and disagreements have also stalled
                    progress in bank privatization and the passage of an external debt law.


Problems in Donor   Problems also exist concerning the coordination of donor funds,
Coordination        according to the November 1996 and March 1997 donor reports. The
                    November 1996 report stated that donor coordination is the key to
                    matching scarce donor funds with programs so as to avoid gaps and
                    overlaps, to ensure appropriate geographical balance, and to obtain the
                    maximum amount of synergy between the different donor programs.
                    Although donors surpassed their original funding commitment target set
                    for 1996, there were a number of gaps, mismatches, and surpluses in the
                    overall reconstruction program.

                    Many areas of the reconstruction program were underfunded, specifically
                    job creation, social safety net programs, health and education, transport,
                    and energy. In 1996, the transport sector had a shortfall of $125 million, or
                    39 percent of the first-year program requirement. The energy sector, with
                    $284 million committed against estimated 1996 needs of $403 million, had
                    an overall funding gap totaling $119 million. And telecommunications, with
                    $37 million committed against the $160 million program requirement, was
                    significantly underfunded. According to a State Department official,
                    telecommunications was underfunded because donors refused to commit
                    money for three separate ethnic phone systems, particularly since the
                    Bosnian Serb entity would not even link its system with the other two.

                    Other areas of the program, notably housing, fiscal support, and industry
                    and finance, met or exceeded their 1996 program requirements. The
                    March 1997 donor report said that improved coordination of donor
                    activities in the housing sector was needed and called for better planning
                    to coordinate the efforts of the local municipalities, the many donors, and
                    the many nongovernmental organizations repairing the homes. Although
                    the education sector met its 1996 target, it lacked adequate funding to
                    complete the primary school reconstruction program. Overall, the industry
                    and finance sector well exceeded its 1996 program requirement. However,
                    while the commitments for lines-of-credit and technical assistance
                    exceeded the first-year requirements, other components of the program,
                    such as equity funds, remained under-funded.

                    The World Bank and U.S. government took actions during 1996 to improve
                    donor coordination. The World Bank established sector task forces in
                    Sarajevo that, according to USAID officials, helped to correct donor



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                        coordination problems that occurred early in the reconstruction program.
                        The United States, recognizing the coordination problem, appointed a
                        Special Representative to serve as U.S. reconstruction coordinator in
                        mid-1996. In early 1997, the successor Special Representative was
                        appointed to a newly created position of Deputy High Representative for
                        Economic Reconstruction, where he will coordinate the international
                        effort.


                        During 1996, according to a State Department official, all major bilateral
Use of Conditionality   donors had withheld economic assistance from Bosnian Serb-controlled
in Providing            areas because Bosnian Serb political leaders failed to comply with key
Economic Assistance     human rights and other provisions of the Dayton Agreement. Donors in
                        1996 at times also withheld assistance in the Federation at the city/town
                        level due to noncompliance with the Dayton Agreement. For example,
                        USAID held up implementation of three municipal infrastructure projects
                        because local authorities would not allow full freedom of movement for
                        refugees and displaced persons wishing to return to their homes. As of
                        January 1997, USAID had restarted only one of these three projects.

                        In December 1996, the Peace Implementation Council emphasized that the
                        international community would use economic assistance as a tool to
                        encourage compliance or discourage noncompliance with Dayton goals,
                        such as furthering the return of refugees and cooperating with the war
                        crimes tribunal.51 Further, the donors’ conference, originally planned to be
                        held at the end of February 1997, was postponed because Bosnia’s council
                        of ministers had not yet adopted key economic laws.

                        Western observers in Bosnia have questioned the effectiveness of
                        threatening to withhold economic assistance from Bosnian Serb- and
                        Croat-controlled areas in this conditional manner, partly because they
                        have received little international assistance to date. They also questioned
                        attaching political conditions to economic assistance as a means of
                        encouraging Bosnian Croat compliance with the Dayton Agreement
                        because Bosnian Croats have other sources of financial support, including
                        Croatia.52 Furthermore, according to World Bank officials, conditioning
                        economic assistance on political leaders’ compliance with the Dayton
                        Agreement is complicated by the difficulty of determining the appropriate

                        51
                         The Congress has placed conditions on some U.S. assistance. See, for example, Public Laws 104-107,
                        section 584; 104-122; and 104-208, Title II.
                        52
                         According to State officials, Bosnian Croat-controlled areas received little economic assistance to
                        date because they suffered little war damage.



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mix of politically conditional aid with humanitarian aid, which is not
conditional, as well as by the need for making judgment calls in regard to
financing ongoing projects.

State and USAID officials told us that in March 1997, some Bosnian Serb
political leaders, including the President of Republika Srpska, had shown a
willingness to accept economic assistance that includes conditions such as
employing multiethnic work forces. These leaders, according to State, are
willing to accept conditional assistance because they see the growing gap
in economic recovery between the Federation and Republika Srpska.
However, as of April 16, 1997, there were no tangible results in this area.




Page 65                                   GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 5

Progress in Returning Refugees and
Displaced Persons to Their Homes

                        Despite guarantees in the Dayton Agreement and significant international
                        effort, the return of refugees and displaced persons to their homes has
                        barely begun in Bosnia. Fear, stemming from lack of personal security;
                        resistance from Bosnian political officials of all ethnic groups; poor
                        economic prospects; and lack of suitable housing have combined to hinder
                        returns. The returns that did take place in 1996 were mainly people going
                        back to areas controlled by their own ethnic group because returns across
                        ethnic lines proved extremely difficult. Efforts to address the return
                        problem affect many aspects of the Bosnia peace operation, leading to
                        calls by the international community for improved integration among
                        groups responsible for security and political and economic reconstruction
                        implementation.


                        Bosnia’s constitution and annex 7 of the Dayton Agreement clearly
Political Leaders Are   established the right of refugees and displaced persons to freely return to
Actively Discouraging   their homes of origin. The political leadership of all three ethnic groups
Returns                 further agreed to take action to “prevent activities within their territories
                        which would hinder or impede the safe and voluntary return of refugees
                        and displaced persons” and not to hinder UNHCR and other organizations’
                        efforts to implement UNHCR’s repatriation plan. Annex 7 also established a
                        Commission for Real Property Claims of Refugees and Displaced Persons.
                        Its mission is to help receive and resolve claims for property from which
                        people fled and to which they wish to return.

                        In practice, all three ethnic groups have widely ignored the various
                        agreements to allow returns. In October 1996, UNHCR reported that “in
                        general, there has been no compliance with the provisions of Annex 7.” As
                        a result, only about 250,000 out of the estimated 2 million Bosnian refugees
                        and displaced persons returned to their homes during 1996—less than a
                        third of UNHCR’s initial planning figure of 870,000.53 Over 80,000 others fled
                        or were driven from their homes during the year. Most Bosnians would
                        have had to cross ethnic lines to return home, but few of the returnees in
                        1996 did so.


Security Concerns       The issue of cross-ethnic returns is highly contentious politically and has
Hindered Returns        led to many violent incidents. Bosnian Serbs and Bosnian Croats do not
                        want to allow Bosniaks to return to their homes, because this goes counter
                        to their war aims of creating ethnically pure states separate from Bosnia.
                        However, according to international observers, the return of Bosniaks to

                        53
                          In May 1996, a UNHCR official told us that this initial estimate was overly optimistic.



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their prewar homes is one of the highest priority policy objectives for
Bosniak leaders. These leaders have encouraged returns across ethnic
lines to test the right to return home.

Many of the violent incidents in Bosnia during 1996 were the direct result
of Bosniaks attempting to cross ethnic lines to visit or re-settle in their
prewar homes. For example, in a series of incidents in late 1996, groups of
Bosniak displaced persons crossed the interentity boundary line and
forced their way into abandoned villages within the zone of separation. In
each instance these unannounced movements triggered violent responses
from Bosnian Serbs. International observers told us they suspected that
these actions had been organized by Bosniak political leaders in an effort
to occupy strategically important areas within Republika Srpska. In some
instances, members of the Bosniak military supported these efforts.54 IFOR
officials in Tuzla told us it was challenging to contain and eventually
control the ensuing violence. A DOD official also told us he was concerned
that these returns of displaced persons would continue to trigger violence
and potentially affect NATO’s ability to draw down its military force in
Bosnia.

In general, the political leaders of all three ethnic groups have not met
their obligation to provide security for refugees and displaced persons of
other ethnic groups. Ethnic minorities are facing growing levels of
violence and intimidation. In an effort to discourage cross-ethnic returns,
over 300 homes were destroyed in late 1996 and early 1997. In many cases,
these homes were blown up after they appeared on UNHCR lists of Bosniaks
intending to return and reoccupy their homes in Bosnian Serb-controlled
areas (see fig. 5.1).




54
  A human rights monitor and IFOR officials told us that there is no evidence that the Bosniak military
forced civilians to cross ethnic lines in these instances. Instead, according to the human rights
monitor, the goals of the two groups were mutually supporting.



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Figure 5.1: Blown Up Housing in the Brcko Area




                                         Expulsions of minorities from Serb- (Banja Luka), Croat- (West Mostar),
                                         and Bosniak- (Sarajevo suburbs)55 controlled areas continued throughout
                                         1996. While the Bosniak record is generally better than that of Bosnian
                                         Serbs and Croats, Bosniaks have prevented Bosnian Croats and Serbs
                                         from returning to their homes in some areas under their control and have
                                         allowed harassment of other ethnic groups in Sarajevo and elsewhere in
                                         Bosniak-controlled areas.


Leaders Create Nonviolent                Active resistance from political leaders of the three major ethnic groups
Barriers to Return                       has also created barriers to returns. Bosnian Serb authorities have publicly
                                         stated that there can be no returns of Bosnian Croat and Bosniaks to
                                         Republika Srpska territory. Serb displaced persons from the western parts

                                         55
                                          Throughout 1996 Bosniaks attempted to force out Bosnian Serbs who did not leave when
                                         administrative control of the Sarajevo suburbs was given to Bosniak authorities in February 1996.



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                           of the Federation have not been able to return home—Republika Srpska
                           officials have used pressure and intimidation to keep them from trying to
                           leave, and Bosnian Croat officials have forbidden them from returning.
                           Bosniak authorities in Bugojno have also hindered Bosnian Croat efforts
                           to return.

                           The regional nature of the refugee problem further complicates efforts for
                           returns. Some 30,000 Croatian Serb refugees who fled from areas that
                           were occupied by the Croatian army in 1995 are already living in
                           Republika Srpska. Bosnian Serb political leaders say they cannot allow
                           Bosniaks or Bosnian Croats to return because the Croatian Serbs currently
                           occupy all available housing. Further, several international observers were
                           concerned that thousands of Croatian Serbs could flee the eastern
                           Slavonia region of Croatia when the U.N. mission there ends during the
                           summer of 1997, placing additional burdens on already over-crowded
                           areas in Republika Srpska.

                           According to international observers, thousands of Bosnian families
                           cannot return to their prewar homes across ethnic lines because they are
                           now occupied by someone else. In many locations, officials have moved
                           displaced persons from the ruling ethnic group into homes that were
                           previously occupied by families from other ethnic groups. Moreover, both
                           the Federation and Republika Srpska have adopted restrictive property
                           laws that make it difficult for persons to reclaim homes abandoned during
                           the war. A number of human rights organizations are involved in property
                           disputes, as property rights issues are the type of human rights complaint
                           they most frequently receive. However, limited progress has been made in
                           resolving property rights complaints. The Commission for Real Property
                           Claims of Refugees and Displaced Persons, which has responsibility under
                           Dayton to resolve these disputes, started taking claims in November 1996,
                           but according to the chairman of the commission, it may not be able to
                           operate beyond June 1997 due to lack of funds. Other human right
                           organizations lack investigative and other resources needed to resolve the
                           complaints.


UNHCR’s Cross-Entity Bus   To help improve freedom of movement across ethnic lines, in May 1996,
Service                    UNHCR began running a free bus line between Bosniak- and Bosnian
                           Serb-controlled neighborhoods in the Sarajevo area. During the year,
                           UNHCR overcame attacks on some buses and efforts of some local political
                           officials to administratively block bus operations. By the end of the year,
                           the bus service had expanded to 11 routes, allowing 241,000 passengers to



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                         Progress in Returning Refugees and
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                         safely cross the boundary between Republika Srpska and the Federation.
                         State Department and UNHCR officials told us the bus line proved to be a
                         great success and offered some hope in an otherwise grim situation.


                         Potential returnees face poor economic prospects, including lack of job
Poor Economic            opportunities and devastated infrastructure. According to international
Conditions Deter         officials and the November 1996 donor report, many Bosnian refugees are
Returns                  reluctant or unwilling to return to Bosnia because of the poor economic
                         conditions there. In recognition of the impact of economic conditions on
                         returns, the World Bank and the Peace Implementation Council have
                         called for improved integration between these areas.

                         In many areas of Bosnia, there is not enough suitable housing to
                         accommodate Bosnians wishing to return home. World Bank figures
                         showed that over half of the prewar housing stock had been destroyed or
                         damaged. Although UNHCR and USAID rehabilitated over 20,000 damaged
                         homes during 1996, some areas in Bosnia continued to suffer serious
                         housing shortages by the end of 1996.56


                         Attempting to return thousands of Bosnians to their prewar homes
Interrelated Nature of   touches on a variety of security, political, and economic issues involving
Return Issue             numerous international organizations and levels of the Bosnian
                         government. At the end of 1996, the international community recognized
                         the need to develop a more integrated approach to address the return
                         issue. In December 1996, the Peace Implementation Council noted the
                         potential impact of political efforts and economic reconstruction on the
                         return of refugees and displaced persons. The Council called on UNHCR, the
                         High Representative, the World Bank, and the European Commission to
                         develop closer linkages in these areas.57 Later that month, a UNHCR
                         humanitarian issues working group developed guidelines for a repatriation
                         program for Bosnia in 1997 and recommended that a plan be finalized and
                         presented to the international community by the spring of 1997. The final
                         plan would be developed in conjunction with national, regional, and
                         international organizations and would include political, economic, and
                         security considerations.



                         56
                           The Omnibus Consolidated Appropriations Act of 1997 prohibited the use of Assistance for Eastern
                         Europe and the Baltic States funds for housing repair or construction in Bosnia, unless directly related
                         to efforts of U.S. troops to promote peace. (P.L. 104-208, Title II).
                         57
                           This political guidance came at the 1996 London Peace Implementation Conference.



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The State Department supports the development of a new commission to
address freedom of movement and refugee return issues. Such a
commission could be tasked by the Peace Implementation Council to
develop an integrated plan for securing full compliance with the Dayton
Agreement’s freedom of movement requirements. The commission could
consider all factors associated with the return issue. However, even if this
commission were to be established, State officials told us that refugee and
freedom of movement issues were not likely to be resolved by the time
SFOR withdraws in June 1998.




Page 71                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Chapter 6

U.S. Costs and Commitments Exceed Initial
Estimates

                                       In February 1996, the executive branch estimated that the Bosnia peace
                                       operation would cost the United States about $3.2 billion for fiscal years
                                       1996 and 1997—$2.5 billion in incremental costs for military-related
                                       operations and $670 million for the civilian sector.58 These initial estimates
                                       assumed that U.S. military forces would be withdrawn from Bosnia when
                                       IFOR’s mission ended in December 1996. The executive branch’s current
                                       cost estimate for fiscal years 1996 and 1997 is more than $5.9 billion: $5
                                       billion in incremental costs for military-related operations and about
                                       $941 million for the civilian sector. Almost all of the increase was due to
                                       the decision to extend the U.S. military presence in and around Bosnia
                                       through June 1998.

                                       As presented in the fiscal year 1998 budget request to Congress, the United
                                       States plans to commit about $1.8 billion for the Bosnia peace
                                       operation—about $1.5 billion for military operations and $340 million for
                                       civilian activities. Under current estimates, which assume that the U.S.
                                       military participation in Bosnia will end by June 1998, the United States
                                       will provide a total of about $7.7 billion for military and civilian support to
                                       the operation from fiscal years 1996 through 1998.


                                       At the end of the fiscal year 1996, the executive branch estimated that
Fiscal Year 1996                       about $3 billion in fiscal year 1996 funds would be spent in support of the
Estimates and Costs                    Bosnia peace operation (see table 6.1). This is approximately $569 million
                                       more than the executive branch’s initial estimate for the fiscal year.

Table 6.1: Comparison of Fiscal Year
1996 Estimates and Costs for the       Dollars in millions
Bosnia Peace Operation                                                                                 Fiscal year-end
                                       Government branch                           Initial estimatea         estimateb                 Costsc
                                       DOD                                                   $2,000               $2,479                 $2,479
                                       Civilian agenciesd                                        470                  560                  501
                                       Total                                                 $2,470               $3,039                 $2,980
                                       a
                                        As of February 1996.
                                       b
                                           As of December 30, 1996, for DOD and as of October 22, 1996, for civilian agencies.
                                       c
                                        For DOD, costs are incremental costs, i.e, those costs that would not have been incurred if it
                                       were not for the operation. For the civilian agencies, this amount represents obligations.
                                       d
                                        Includes USAID; USIA; and the Departments of State, Agriculture, Commerce, Justice, Labor,
                                       Health and Human Services, and the Treasury.


                                       58
                                        As used in this report, “incremental costs” means those costs that would not have been incurred if it
                                       were not for the operation. This is the same definition that is contained in 10 U.S.C. 127a, as amended
                                       by the National Defense Authorization Act for Fiscal Year 1996.



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                                        U.S. Costs and Commitments Exceed Initial
                                        Estimates




                                        DOD’s incremental costs were about $500 million more than the initial
                                        estimate due to increases in such items as logistics, communications, and
                                        force sustainment.59 DOD incurred some of these additional costs because
                                        IFOR and its large contingent of U.S. troops remained at full strength longer
                                        than originally planned in order to support the September 1996 elections.60


                                        Estimated costs for civilian agencies increased by about $90 million
                                        primarily because of increased spending for humanitarian relief and
                                        refugee assistance. As of April 1997, civilian agencies had not obligated
                                        about $59 million of their fiscal year 1996 funds.


DOD Costs and Estimates                 In fiscal year 1996, DOD incurred about $2.5 billion in incremental costs for
                                        its participation in IFOR and other DOD operations that supported the
                                        Bosnia peace operation (see table 6.2). These other operations included
                                        Operation Deny Flight (now called Deliberate Guard), which involves air
                                        operations for maintaining the no-fly zone over Bosnia, and Operation
                                        Provide Promise, which airlifted and airdropped humanitarian supplies
                                        into Bosnia.

Table 6.2: Fiscal Year 1996 DOD Costs
for Bosnia, by Operation                Dollars in millions
                                        Activity/operationa                                                             Incremental costsb
                                        IFOR                                                                                         $2,073.2
                                        Operation Deny Flight                                                                           225.9
                                        IFOR preparation                                                                                158.5
                                        Operation Provide Promise                                                                         21.7
                                        Total                                                                                        $2,479.3
                                        a
                                         Excludes $30.9 million spent on U.S. participation in a U.N. peacekeeping operation in
                                        Macedonia, $9.3 million spent on enforcement of the arms embargo and U.N. sanctions on
                                        Serbia-Montenegro, and $500,000 spent on U.S. military personnel and supplies for the operation
                                        of a Zagreb hospital in support of the United Nations.
                                        b
                                            As of December 30, 1996.



                                        Most of DOD’s costs—about 89 percent—were in operation and
                                        maintenance accounts that pay for such items as transportation, per diem,

                                        59
                                         For a more detailed discussion of DOD’s costs estimates and costs see Bosnia: Costs Are Uncertain
                                        but Seem Likely to Exceed DOD’s Estimate (GAO/NSIAD-96-120BR, Mar. 14, 1996), and Bosnia: Costs
                                        Are Exceeding DOD’s Estimate (GAO/NSIAD-96-204BR, July 25, 1996).
                                        60
                                          As of March 1996, the U.S. Army assumed that the drawdown of U.S. forces from Bosnia would start
                                        in the summer of 1996 because it was anticipated that elections in Bosnia would occur in June or July.



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                                      U.S. Costs and Commitments Exceed Initial
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                                      supplies, fuel, communications, contractual services, equipment
                                      maintenance, and other mission-related expenses. The remaining costs are
                                      in military personnel accounts. These accounts fund certain special pays
                                      that military personnel deployed to Bosnia are eligible to receive, such as
                                      imminent danger pay, family separation allowance, certain places pay
                                      (formerly called foreign duty pay), and basic allowance for subsistence for
                                      enlisted personnel, as well as the military pay for activated reservists.

                                      The U.S. Army, which is deploying and logistically supporting ground
                                      troops in and around Bosnia,61 incurred the majority of the costs—over
                                      $1.8 billion—in fiscal year 1996, including $37.5 million for NATO
                                      contributions. The U.S. Air Force spent about $340 million, while the Navy
                                      and Marine Corps spent about $97 million and $3 million, respectively. In
                                      addition, about $198 million was spent by other organizations such as the
                                      National Security Agency, the Defense Mapping Agency, the Defense
                                      Intelligence Agency, and the U.S. Special Operations Command.


Civilian Agency Costs and             At the end of the fiscal year, the executive branch estimated that the State
Program Descriptions                  Department, USAID, USIA, and four other agencies would spend about
                                      $555 million in fiscal year 1996 funds for economic reconstruction,
                                      humanitarian aid, democracy and human rights programs, and other
                                      support for civilian organizations in the peace operation (see table 6.3).

Table 6.3: Fiscal Year 1996 U.S.
Funding for Civilian Aspects of the   Dollars in millions
Bosnia Peace Operation                                                        Fiscal year-end              Amount                  Amount
                                      Program/activitya                             estimateb             obligated             unobligated
                                      Economic reconstruction                            $183.8               $151.8                     $32.0
                                      Humanitarian assistance                             253.5                243.1                      10.4
                                      Democracy and human rights                            56.6                 46.7                      9.9
                                      Other support for civilian                            65.9                 59.7                      6.2
                                      programs/activities
                                      Total                                              $559.8               $501.3                     $58.5
                                      a
                                       Includes programs and activities funded by USAID; USIA; and the Departments of State,
                                      Agriculture, Commerce, Justice, Labor, Health and Human Services, and the Treasury.
                                      b
                                          As of October 1996.




                                      61
                                       The U.S. Army is logistically supporting ground troops for all services in Bosnia, Croatia, and
                                      Hungary.



                                      Page 74                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                                        Chapter 6
                                        U.S. Costs and Commitments Exceed Initial
                                        Estimates




                                        Most of this assistance, about $337 million, was funded by USAID primarily
                                        in the areas of economic reconstruction, humanitarian assistance, and
                                        democracy and human rights. The State Department provided about
                                        $164 million for programs such as landmine removal under the economic
                                        reconstruction program, support for democracy and human rights, and
                                        refugee assistance. Other U.S. civilian agencies—USIA and the Departments
                                        of Justice, Health and Human Services, Labor, the Treasury, and
                                        Commerce—also administered relatively small programs that directly or
                                        indirectly supported the Bosnia peace operation. For example, USIA funded
                                        small-scale democracy projects, including independent media, civics
                                        education, and international exchange programs. Most of the unobligated
                                        funds were in the areas of economic reconstruction and democracy and
                                        human rights. Appendix V provides more information on civilian program
                                        costs for the Bosnia peace operation in fiscal year 1996.


                                        In fiscal year 1997, the U.S. government plans to provide about $2.9 billion
Fiscal Year 1997 Cost                   in support of the peace operation (see table 6.4). This is about $2.2 billion
Estimates                               more than the executive branch’s initial estimate, which assumed that all
                                        U.S. troops in or supporting the peace operation would be out of Bosnia
                                        and neighboring countries by December 20, 1996.

Table 6.4: Fiscal Year 1997 U.S. Cost
Estimates for the Bosnia Peace          Dollars in millions
Operation                                                                                                                              Current
                                        Government branch                                                 Initial estimatea          estimateb
                                        DOD                                                                            $500            $2,500
                                        Civilian agenciesc                                                               200              381
                                        Total                                                                          $700            $2,881
                                        a
                                         As of February 1996.
                                        b
                                            As of January 30, 1997 for DOD; as of October 25, 1996 for civilian agencies.
                                        c
                                         Civilian agencies include USAID, USIA, and the Department of State.



                                        In January 1997, DOD estimated its fiscal year 1997 incremental costs for
                                        the operation at about $2.5 billion, an increase of about $2 billion over the
                                        initial estimate. This increase is primarily attributable to the decision to
                                        commit up to 13,500 troops to participate in or support SFOR.62 These funds
                                        will support two troop rotations, equipment refurbishment, and increased
                                        intelligence operations in the former Yugoslavia. During the third week of


                                        62
                                            Up to 8,500 U.S. troops will be deployed in Bosnia and 5,000 troops outside of Bosnia.



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                        Chapter 6
                        U.S. Costs and Commitments Exceed Initial
                        Estimates




                        November 1996, the number of U.S. troops deployed to participate in or
                        support NATO operations in Bosnia peaked at 27,700 as IFOR was in the
                        process of transitioning to SFOR—19,300 in Bosnia and 8,400 in Italy,
                        Hungary, and Croatia. By early December 1996, total U.S. deployment had
                        dropped to 16,000.

                        The U.S. government plans to provide about $381 million in support of the
                        peace operation’s civilian elements in fiscal year 1997. This includes about
                        $184 million for economic reconstruction, $98 million for humanitarian
                        assistance, $40 million for democracy and human rights programs, and
                        $59 million in other support to civilian organizations of the peace
                        operation. According to a State Department official, U.S. civilian
                        commitments may increase during the fiscal year if refugees and displaced
                        persons do not return home in large numbers, as these estimates assume.


                        In the fiscal year 1998 budget request, the President asked Congress to
Fiscal Year 1998 Cost   commit about $1.8 billion in fiscal year 1998 funds to support the peace
Estimates               operation. As of March 1997, the State Department had projected fiscal
                        year 1998 costs for continued humanitarian and transition aid at
                        $340 million, and DOD had projected its fiscal year 1998 costs for the
                        operation about $1.5 billion. DOD’s cost estimate is based on an assumption
                        that all U.S. troops will be out of Bosnia by June 1998.




                        Page 76                                     GAO/NSIAD-97-132 Bosnia Peace Operation
Page 77   GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix I

Background on the Bosnian Conflict


                       In the spring of 1990, Yugoslavia held republic-level elections that brought
                       nationalist and independence-minded governments to power in the
                       republics of Slovenia and Croatia. These elections were followed by the
                       collapse of Yugoslavia’s central civilian authority in 1991, as its republics
                       and various independence movements rejected central authority and
                       escalating ethnic animosities propelled parts of the country into a vicious
                       armed conflict.1

                       In 1991, Serbia, the largest Yugoslav republic, began to dominate Yugoslav
                       institutions and gained control of the Yugoslav army. After Slovenia and
                       Croatia declared their independence in June 1991, Serbia tried forcibly to
                       prevent them from becoming independent. During the ensuing 6-month
                       war in Croatia, Yugoslav army soldiers and Serbian paramilitary forces
                       were stationed in Bosnia. By the end of 1991, ethnic Serbs in areas of
                       Croatia and Bosnia had declared local autonomy and had rejected the two
                       republics’ authority over their regions.


                       Before the war, Bosnia’s population was 4.4 million people—44 percent
Bosnia’s               Muslim, 31 percent Serb, 17 percent Croat, and 8 percent other ethnic
Independence and the   groups. The spring 1990 election in Bosnia resulted in three ethnically
Outbreak of War        based political parties—the Muslim Party of Democratic Action (SDA), the
                       Serbian Democratic Party (SDS), and the Croatian Democratic Union
                       (HDZ)—forming a governing “partnership” under the leadership of
                       President Alija Izetbegovic, a Muslim. After the election, ethnic
                       polarization grew as the republic dealt with nationalist sentiments coming
                       from Croatia and Serbia and growing independence movements from
                       Bosnian Serbs. In February and March 1992, an independence referendum
                       was held, and 63 percent of Bosnia’s electorate—primarily Muslims and
                       Croats—voted for independence. Shortly thereafter, Bosnia gained
                       diplomatic recognition as an independent state and became a member of
                       the United Nations. Throughout the war that followed, ethnic differences
                       were manipulated by SDS and HDZ to sustain concepts of “greater Serbia”
                       and “greater Croatia.”

                       Under the leadership of Radovan Karadzic, SDS and its pan-Serbian
                       nationalists boycotted Bosnia’s independence referendum in an attempt to
                       remain part of Serbia-dominated Yugoslavia and form a “greater Serbia.”
                       By mid-1992 SDS forces, supported by the Yugoslav army and Serbia, had
                       seized territory in northern and eastern Bosnia and controlled 60 percent
                       of Bosnia’s territory. SDS forces began expelling much of the non-Serbian

                       1
                        Except where noted, the material in this appendix was derived from State Department reports.



                       Page 78                                              GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix I
Background on the Bosnian Conflict




population, primarily Muslims and Croats, from areas under their
control—including the cities of Banja Luka, Prijedor, and Doboj—in a
campaign of terror that became known as “ethnic cleansing.” The Bosnian
Serb army also began carrying out massive artillery attacks against
Sarajevo and other population centers such as the Muslim enclaves of
Srebrenica, Gorazde, and Zepa. By mid-1992, SDS had completely
withdrawn from Bosnian institutions and had started creating institutions
for its own ethnically pure state, later named the “Serb Republic,” or
Republika Srpska.

About this same time, Croatian nationalists of the HDZ proclaimed their
own entity within Bosnia, which they called “the Croatia Community of
Herceg-Bosna.” Their army, the Bosnian Croat army, was supported and
controlled by Croatia. Early in the war, the Bosnian government welcomed
the presence of Croatian forces on its territory as the two sides fought
together against Serbian aggression. By April 1993, however, periodic
skirmishing between the Bosnian government army and Bosnian Croat
army escalated into outright war, as HDZ insisted on creating Herceg-Bosna
with Mostar as its capital. When the Bosnian government refused to
submit its troops to Bosnian Croat army command, the Bosnian Croat
army blockaded Mostar, attacked it, brutalized its Muslim residents, and
evicted non-Croats from west Mostar and nearby cities of Stolac and
Capljina. Regular Croatian army units, originally in Bosnia under a
bilateral cooperation pact, fought on the side of the Bosnian Croat forces.

The Bosnian government, headed by President Izetbegovic of SDA,
supported and fought for a unified, multiethnic Bosnia. By the end of 1993,
the government was Muslim-dominated and controlled only 20 percent of
the country.2 While only the Bosnian Serbs pursued “ethnic cleansing” as a
matter of policy, local units of Bosnian government troops also killed
many people out of nationalistic or religious hatred and targeted civilians,
particularly Bosnian Croats during the conflict in central Bosnia. In early
1994, Bosnian government forces started receiving material and other
support from Iran and other Islamic countries in contravention of the
United Nations-mandated and U.S.-supported arms embargo.




2
 The Bosnian Serb army controlled 70 percent.



Page 79                                         GAO/NSIAD-97-132 Bosnia Peace Operation
                    Appendix I
                    Background on the Bosnian Conflict




                    In 1992 and 1993, the U.N. Security Council sent peacekeepers from the
International       United Nations Protection Force (UNPROFOR) to Bosnia to facilitate the
Interventions and   delivery of humanitarian relief being provided by the U.N. High
Shift in the War    Commissioner for Refugees (UNHCR),3 established a “no-fly zone” over
                    Bosnia, and declared Sarajevo and five Muslim enclaves “safe areas” under
                    the protection of UNPROFOR. NATO agreed to enforce the no-fly zone and use
                    air power to protect U.N. forces if attacked.4

                    The U.N. and NATO operations provided humanitarian assistance to
                    thousands of people in the region, but they did not accomplish their other
                    mandated objectives because (1) UNPROFOR lacked resources required for
                    its operations; (2) U.N. operations lacked overall leadership to provide
                    consistent direction and strategy for the mission, effectively coordinate
                    military and humanitarian operations, and develop an overall plan; and
                    (3) UNPROFOR used NATO airstrikes sparingly due to UNPROFOR concerns
                    about having to appear impartial in its dealings with the Bosnian parties.5

                    In March 1994, after U.N.-European Union diplomatic efforts had stalled,
                    U.S. mediation produced an agreement between the Bosnian government,
                    Bosnian Croats, and the government of Croatia to establish a Federation
                    between Bosniaks and Croats in Bosnia, which would be joined in
                    confederation with Croatia. This agreement led to a cease-fire between the
                    Bosniaks and Bosnian Croats and started the process of transforming the
                    internal structure of the Bosnian territories under Bosniak and Croat
                    control. During the remainder of the war, the cease-fire between the
                    Bosniaks and Croats held, but the Federation did not function as a
                    government and Herceg-Bosna continued to exist.

                    In the spring of 1994 the Contact Group—the United States, Russia,
                    Britain, France, and Germany—was established to broker a settlement
                    between the Federation and Bosnian Serbs. By the summer of 1995, the
                    United States had taken the lead in the negotiation process.

                    In July 1995, the Bosnia Serb army launched an offensive and forced the
                    removal of the majority Bosniak population from the U.N. safe area of
                    Srebrenica by killing many thousands and driving out the rest. In response
                    to the attack on Srebrenica and continued ethnic cleansing, in July NATO

                    3
                     UNPROFOR was originally established in February 1992 to oversee the cease-fire in Croatia.
                    4
                     NATO also enforced the U.N. arms embargo against the former Yugoslavia.
                    5
                     See Humanitarian Intervention: Effectiveness of U.N. Operations in Bosnia (GAO/NSIAD-94-156BR,
                    Apr. 13, 1994) and Peace Operations: Update on the Situation in the Former Yugoslavia
                    (GAO/NSIAD-95-148BR, May 8, 1995).



                    Page 80                                              GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix I
Background on the Bosnian Conflict




started an intensive month-long bombing campaign of Bosnian Serb
military targets. About this time, a joint Bosniak-Croat offensive supported
by Croatia allowed the Federation to capture about 20 percent of Bosnian
Serb-controlled territory in western and northwestern Bosnia.

In October 1995, a cease-fire resulted from the changed battlefield
circumstances, the intensive diplomatic effort by the United States and the
Contact Group, and the cumulative effect of economic sanctions on Serbia
and Bosnian Serb-controlled territory. The cease-fire, which UNPROFOR
monitored, ultimately led to the negotiation of the General Framework
Agreement for Peace in Bosnia and Herzegovina in November 1995 near
Dayton, Ohio. The agreement was signed on December 14, 1995, in Paris.




Page 81                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix II

The Program to Train and Equip the
Federation Army

                  In 1996 Congress approved and the United States began a program that
                  was intended to train and equip the Bosniak and Bosnian Croat armies as
                  they are integrated into a unified Federation army.6 This program was
                  designed to help create a stable military balance within Bosnia by
                  offsetting Republika Srpska’s military advantages while staying within the
                  Dayton Agreement’s arms control limits; to provide incentives and
                  assistance for Bosniak and Bosnian Croat political leaders to integrate
                  their armies and to develop an integrated defensive and deterrence
                  capability; and to eliminate the Bosniaks’ wartime military and intelligence
                  ties with the Republic of Iran.7


              •   In November 1995, the Department of Defense commissioned a U.S-based
Chronology        organization—the Institute for Defense Analyses—to identify the force
                  structure and military equipment needs of the peacetime Federation army.
              •   In December 1995, the President told Congress that the United States
                  would follow through on commitments made during the Dayton
                  negotiations to initiate the train and equip program. That same month, the
                  State Department established the Office of the U.S. Special Representative
                  for Military Stabilization in the Balkans to run the Federation train and
                  equip program.
              •   The Federation’s force structure study was completed on February 5, 1996.
                  It recommended the creation of a unified Bosniak-Croat joint military staff
                  and an integrated peacetime force of 55,000 active-duty troops composed
                  of 14 brigades (10 Bosniak and 4 Bosnian Croat). It also identified the
                  types of training and facilities such a force required and the heavy and
                  light equipment it would need. The quantities of heavy weapons the study
                  recommended were kept within the limits proposed by the arms control
                  section of the Dayton Agreement. About $50 million in cash was
                  considered sufficient to initiate a basic training program.8
              •   In March 1996, the U.S. government announced the program and began
                  soliciting international cash and in-kind donations for the program at a
                  conference held in Turkey. Although 32 nations and 5 international
                  organizations attended, only Turkey and the United States made a specific
                  pledge at that time, while 5 other nations pledged to provide unspecified

                  6
                   Public Law 104-107, section 540.
                  7
                   In 1996, according to a State Department official, the U.S. government offered to extend the program
                  to the Bosnia Serb army if Bosnian Serb political leaders agreed to implement the Dayton provisions.
                  8
                   According to a State Department official, the cost methodology used in the study showed that the
                  program would require up to $800 million to be fully implemented, including about $600 million in
                  in-kind assistance and $200 million in cash to conduct the program. The study’s method of valuing
                  equipment and services differs from that used by the U.S. government in valuing its contribution to the
                  program.



                  Page 82                                               GAO/NSIAD-97-132 Bosnia Peace Operation
    Appendix II
    The Program to Train and Equip the
    Federation Army




    material and technical assistance in Bosnia. Following an appeal by the
    U.S. President in April, subsequent donations were announced, including
    sufficient cash donations from five Islamic nations to start the program,
    and training courses were started in three other countries.
•   On May 29, 1996, a U.S.-based firm—Military Professional Resources,
    Incorporated—was awarded a contract by the Federation government to
    begin a basic train and equip program. This contract included provisions
    for integrating the Federation Ministry of Defense and organizational
    structure of the Federation army, establishing training schools, and
    training the army on equipment that would be provided by the United
    States.
•   On June 26, 1996, the President certified that (1) the Federation had
    complied with article III of annex 1A of the Dayton Agreement concerning
    the withdrawal of foreign forces from Bosnia; and (2) intelligence
    cooperation on training, investigations, and related activities between
    Iranian officials and Bosnian officials had been terminated. According to
    IFOR and U.S. government officials, a number of foreign fighters remained
    in Bosnia as of December 1996, but they had acquired Bosnian citizenship
    and were not actively engaged in any military activities in conjunction with
    the Bosnian government.
•   On July 9, 1996, a Federation defense law was signed that created an
    integrated Federation Ministry of Defense and joint high command and
    called for the Federation partners to fully integrate their armies by
    August 1999.
•   On July 16, 1996, the U.S.-based firm signed the contract with the
    Federation. The contract included an option for a 13-month extension if
    necessary.
•   In August 1996, the contractor began performing the contract. As of
    December 1996, according to contractor officials, the contractor had about
    170 trainers and advisers in Bosnia to carry out the contract, which covers
    four broad undertakings: (1) to conduct infantry unit training and
    integration, provide individual soldier training, and develop a
    noncommissioned officer corps; (2) to train and integrate the staffs of the
    Federation Ministry of Defense and Joint High Command; (3) to integrate
    the Federation military logistics and logistics management systems; and
    (4) to conduct heavy weapons integration and training.




    Page 83                                 GAO/NSIAD-97-132 Bosnia Peace Operation
                      Appendix II
                      The Program to Train and Equip the
                      Federation Army




                      As of March 27, 1997, the status of the four areas of the contract was as
Train and Equip       follows:
Contract Status
                  •   The small unit infantry training had made the most progress, according to
                      contractor officials in Bosnia. In August 1996, the United States began
                      delivering light equipment and weapons. That month the contractor also
                      began to provide military training, including training for three Federation
                      brigades and seminars for senior leaders. The contractor opened the
                      Federation army school for officers and noncommissioned officers as
                      scheduled on October 7, 1996, and completed instruction for its first three
                      classes of Bosniak and Bosniak Croat army personnel by
                      mid-January 1997. According to State Department officials, a total of 523
                      students—officers and non-commissioned officers—have graduated from
                      the school.
                  •   As of mid-March 1997, the Ministry of Defense had moved into its Sarajevo
                      headquarters building, and both Bosniak and Bosnian Croat officials had
                      been named to senior Ministry and Joint Military Command positions.
                      Joint working groups were formed to conduct the joint staff integration
                      process, according to a contractor official, but both the Bosniak and the
                      Bosnian Croat defense organizations still functioned separately.
                  •   The logistics management section of the contract, although approved in
                      theory, remained in the discussion phase. A contractor official told us that
                      a lack of trust between the parties and a reluctance to abandon their
                      wartime logistics sources had slowed performance of this section of the
                      contract.
                  •   The heavy weapons integration and training task had not progressed as
                      scheduled because the U.S. heavy weapons shipment had been delayed by
                      about 1 month from October to November 1996. The shipment had been
                      sent on the understanding that the Federation’s Deputy Minister of
                      Defense would be removed. The ship carrying the weapons arrived
                      October 24 but did not unload until November 21, after the Federation
                      Minister of Defense resigned and Deputy Minister of Defense had been
                      removed.

                      According to U.S. government and contractor officials, the Federation
                      train and equip program will not be completed within the 13-month
                      contract period, but the Federation government will probably exercise its
                      option to extend the contract for an additional 13 months.




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                    Appendix II
                    The Program to Train and Equip the
                    Federation Army




                    As of April 17, 1997, 14 countries had pledged at least $376 million in cash,
Status of Program   equipment, training, and technical support for the program for the
Donations           Federation military.9 Most of the program donors are Islamic countries, as
                    concerns over the program’s potential to destabilize the military situation
                    have led most members of the European Union—with the exception of
                    Germany—to decline to participate in the program.10 The U.S. contribution
                    to the program included donations of $100 million in drawdown equipment
                    and services.11 DOD also provided, and will continue to provide, additional
                    defense articles under the Excess Defense Articles program.12 Table II.1
                    provides information on the status of equipment donations as of March 31,
                    1997.




                    9
                     Not all donors provided an estimate of the value of their contribution, according to State Department
                    officials.
                    10
                      According to a State Department official, the European Union renewed its ban on arms transfers to
                    the former Yugoslavia in January 1997. Germany offered to provide training on U.S.-provided
                    equipment through its own bilateral program rather than donate equipment.
                    11
                     For fiscal year 1996, Congress authorized the transfer of up to $100 million in defense articles from
                    DOD stocks and DOD services to the government of Bosnia in Public Law 104-107, section 540. The
                    State Department and DOD refer to this as “drawdown authority.”
                    12
                     DOD provides excess defense articles under section 516 of the Foreign Assistance Act of 1961, as
                    amended (22 U.S.C. 2321j).



                    Page 85                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                                              Appendix II
                                              The Program to Train and Equip the
                                              Federation Army




Table II.1: Equipment Donations to the Train and Equip Program, as of March 31, 1997
Dollars in millions
                                Equipment value, quantity,
Donor               Total value and type                              Other                     Status
                               a                                 bc
United States           $103.44 $51.5 in drawdown equipment : $34 for transport and other
                                                              servicesd
                                45 M-60 tanks

                                   15 UH-1H helicopters
                                                                      .76 for IMETe             First shipment of light arms and
                                   80 M113 armored personnel                                    equipment delivered August 29,
                                   carriers                                                     1996.

                                   840 AT-4 light antitank weapons                              Bulk of heavy arms and
                                                                                                equipment delivered
                                   46,100 M-16 rifles                                           November 21, 1996.

                                   1,000 M60 machine guns                                       Helicopters yet to be delivered.

                                   80 M2 .50 caliber machine guns

                                   45 M85 machine guns

                                   45 M245 machine guns

                                   2,332 Radios

                                   4,100 Tactical telephones

                                   168 Generators

                                   400 Binoculars

                                   Combat training simulation
                                   systems

                                   Maps

                                   Ammunition                                                   Uniforms, publications
                                                                                                delivered March 1997.
                                   Uniforms

                                   Publications

                                   $2.64 in excess defense
                                   articles:c

                                   116 155mm Towed Howitzers                                    Howitzer deliveries to start in
                                                                                                September.
                                                                                                                      (continued)




                                              Page 86                                  GAO/NSIAD-97-132 Bosnia Peace Operation
                                             Appendix II
                                             The Program to Train and Equip the
                                             Federation Army




Dollars in millions
                                   Equipment value, quantity,
Donor                  Total value and type                             Other                                 Status
United Arab Emirates         $120 42 French-made AMX30 tanks            Artillery training in United Arab     Delivered 36 howitzers on
                                                                        Emirates                              November 27, 1996.
                                   36 105mm howitzers

                                   44 Armored reconnaissance
                                   vehicles
Egypt                        $3.8 12 130mm guns                         Officer training in Egypt             Equipment all delivered by early
                                                                                                              December.
                                   12 122mm howitzers

                                   18 Antiaircraft guns
Turkey                       $2.0 1,000 Rifles                          $2 million for tank and artillery     Arms delivered in July;
                                                                        training in Turkey                    two training courses complete
                                   100 Grenade launchers                                                      or underway.

                                   Ammunition
Pakistan                                                                Technical training
           f
Germany                                                                 Helicopter pilot and armored
                                                                        vehicle maintenance training in
                                                                        Germany
Qatar                                                                   Technical training
Bangladesh                                                              Technical training
Indonesia                                                               Technical training
Morocco                                                                 Unspecified

                                             Legend

                                             IMET = International Military Education and Training Program
                                             a
                                              The State Department estimated the value of the total U.S. equipment and transportation
                                             contribution at $293 million to $303 million based on current commercial market value estimates.
                                             b
                                              There is $14.5 million in drawdown authority remaining. According to State Department officials,
                                             $10.8 million of this amount will be used to provide additional equipment, and about $3.7 million
                                             will be used to refurbish, transport, and provide spares for the howitzers.
                                             c
                                              The value of these articles is not included in DOD’s incremental cost estimates included in
                                             chapter 6 of the report.
                                             d
                                              In chapter 6, these transportation costs are included in DOD’s incremental cost estimates and
                                             IMET costs are included in civilian cost estimates.
                                             e
                                              This figure consists of $259,000 in fiscal year 1996 and $500,000 in fiscal year 1997. The IMET
                                             program is a world wide grant training program that, among other objectives, seeks to promote
                                             military rapport between the United States and foreign countries and promote better
                                             understanding of the United States, including its people, political system, and institutions. IMET
                                             funding was allocated for Bosnia, but funding has been made available only to the Federation as
                                             of April 1997. IMET funding will not be made available for the Bosnian Serbs until they comply
                                             with the Dayton agreement, according to a State Department official.
                                             f
                                              Germany is providing this assistance as part of its own bilateral program with the Federation.




                                             Page 87                                                GAO/NSIAD-97-132 Bosnia Peace Operation
                    Appendix II
                    The Program to Train and Equip the
                    Federation Army




                    In addition to the equipment donations, five Islamic countries pledged a
                    total of $147 million in cash donations as of April 8, 1997. Of this amount,
                    $127 million was deposited in the program’s account held by the U.S.
                    Treasury; $40 million of deposited funds have been obligated. One country,
                    Brunei, has pledged but not yet deposited an additional $20 million.


                    To complete the program, the Bosniak and Bosnian Croat political leaders
Remaining Program   would have to (1) secure funding to maintain the Federation army;13
Requirements        (2) identify donors to make up equipment shortfalls, for example, 2,700
                    trucks; and (3) fulfill their commitments to integrate their forces. In
                    January 1997, a State Department official told us that the United States is
                    not actively seeking additional funds for the program and would not do so
                    until the Federation identifies additional requirements for cash donations
                    and expends the funds currently on account. Furthermore, DOD intends to
                    provide 21 heavy equipment transporters to the Federation from excess
                    defense article stocks before the end of 1997. Although the State
                    Department has assessed the price and availability of compatible military
                    equipment in other countries, as of April 1997 no country had made
                    additional arms donations to the program to address remaining equipment
                    shortfalls.




                    13
                      The Federation’s force structure proposal scaled back its peacetime force level from 55,000 troops to
                    a more affordable level of 30,000-35,000 troops.



                    Page 88                                               GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix III

Results of Bosnia’s September 1996 National
and Entity Elections

                                       When Bosnians went to the polls in September 1996, they were voting for a
                                       variety of public offices at different levels of government. Although the
                                       ruling political parties were the major winners on election day, opposition
                                       parties, particularly in Republika Srpska, did better than expected.


                                       At the national level, voters throughout Bosnia voted for two offices—the
National Level                         Presidency and for members of the Bosnian House of Representatives.
Election Results
                                       The Bosnian Constitution created a national Presidency with three
                                       members—one for each ethnic group. Voters whose ballots were counted
                                       in the Federation were able to select either the Bosnian Croat or Bosniak
                                       member of the Presidency. Voters who cast their ballots in Republika
                                       Srpska were only able to vote for a Bosnian Serb candidate. The ruling
                                       parties captured all three seats of the Presidency by wide margins,
                                       although the race for the Bosnian Serb member was closer than expected.
                                       The Bosniak SDA candidate, Alija Izetbegovic, received the most votes and
                                       was declared Chair of the Presidency. (See table III.1.)

Table III.1: September 1996 Election
Results for Bosnian Presidency                                             Winning        Percent of Second place candidate
                                       Position                            party          votes cast and percent of votes cast
                                       Bosniak Member of Presidency SDA                             80 Party for Bosnia, 14 percent
                                       Bosnian Serb Member of              SDS                      67 Democratic Patriotic Block,
                                       Presidency                                                      30 percent
                                       Bosnian Croat Member of             HDZ                      89 United List, 10 percent
                                       Presidency
                                       Source: Election data from the Organization for Security and Cooperation in Europe (OSCE).



                                       The Bosnian House of Representatives is the highest directly elected
                                       legislative body in Bosnia. Federation voters selected 28 of the 42
                                       members of the House; the other 14 were selected by voters in Republika
                                       Srpska. Voters cast their ballots for specific political parties, which were
                                       then awarded seats based on the percentage of the vote they received
                                       within each entity. The ruling parties won 36 of the 42 seats in the Bosnian
                                       House of Representatives (see fig. III.1).




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                                          Appendix III
                                          Results of Bosnia’s September 1996 National
                                          and Entity Elections




Figure III.1: September 1996 Election Results for Bosnian House of Representatives



                                                    Ruling Bosniak
                                                       SDA 19
                                                 SDA 19




                                                                            Party for Bosnia
Ruling Bosnia Serb                                                                  2
      SDS 9
                                                                        Bosnia     2
                                                                          United List
               SDS 9                                                 United List
                                                                               2   2
                                                                People's Union 2
                                                                            People's Union for Peace
                                               HDZ 8                                   2

                                               Ruling Bosnia Croat
                                                     HDZ 8
                                          Source: OSCE election data.



                                          In the Federation, voters selected the 140 members of the Federation
Entity Level Election                     House of Representatives (see table III.2), and 406 representatives to the
Results                                   10 cantonal assemblies (see table III.3).14 In both elections, voters chose
                                          from political parties on their ballot, which then received a proportion of
                                          seats equal to the percentage of vote they received. The two ruling parties
                                          in the Federation—SDA and HDZ—captured nearly 80 percent of the seats in
                                          the Federation assembly and over 80 percent of the seats in the ten
                                          cantonal assemblies. The SDA won the majority in six cantons, while the
                                          HDZ was the majority party in the other four cantons.




                                          14
                                           The Federation consists of 10 smaller governing units known as cantons. The number of seats in the
                                          cantonal assembly varied from canton to canton.



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                                       Appendix III
                                       Results of Bosnia’s September 1996 National
                                       and Entity Elections




Table III.2: September 1996 Election
Results for Federation House of                                                                         Number of       Percent of
Representatives                        Political party                                                     seats        total seats
                                       SDA                                                                    78                56
                                       HDZ                                                                    36                26
                                       United List                                                            11                 8
                                       Party for Bosnia                                                       10                 7
                                       Democratic People’s Union                                               3                 2
                                       Croatian Rights Party                                                   2                 1
                                       Total                                                                 140               100
                                       Source: OSCE election data.



Table III.3: September 1996 Election
Results for Federation Cantonal                                                                         Number of       Percent of
Assemblies                             Political party                                                     seats        total seats
                                       SDS                                                                   221                54
                                       HDZ                                                                   124                31
                                       Party for Bosnia                                                       27                 7
                                       United List                                                            26                 6
                                       Democratic People’s Union                                               6                 1
                                       Croatian Rights Party                                                   2                 1
                                       Total                                                                 406               100
                                       Source: OSCE election data.



                                       In Republika Srpska, voters cast ballots to select the President of
                                       Republika Srpska15 and the 83 members of the Republika Srpska National
                                       Assembly.16 The SDS candidate was elected President of Republika Srpska,
                                       with 59 percent of the vote. The SDA’s candidate garnered 18 percent of the
                                       vote, while the top Bosnian Serb opposition candidate received 16 percent
                                       of the vote (see table III.4).




                                       15
                                         The Federation President is selected by the Federation Assembly.
                                       16
                                         Republika Srpska has no cantonal level of government.



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                                        Appendix III
                                        Results of Bosnia’s September 1996 National
                                        and Entity Elections




Table III.4: September 1996 Election
Results for Republika Srpska                                                                                             Percent of
Presidency                              Political party                                                                   vote cast
                                        SDS                                                                                      59
                                        SDA                                                                                      18
                                        People’s Union for Peace                                                                 16
                                        Democratic Patriotic Block                                                                4
                                        Other parties                                                                             3
                                        Total                                                                                   100
                                        Source: OSCE election data.



                                        Representatives to the Republika Srpska National Assembly were selected
                                        based on the proportional vote received from voters in the Republika
                                        Srpska. The SDS received just over half of the vote, with substantial
                                        numbers of seats going to Bosniak and opposition Bosnian Serb
                                        candidates (see table III.5).

Table III.5: September 1996 Election
Results for Republika Srpska National                                                                 Number of          Percent of
Assembly                                Political party                                                  seats           total seats
                                        SDS                                                                   45                 54
                                        SDA                                                                   14                 17
                                        People’s Union for Peace                                              10                 12
                                        Serb Radical Party                                                     6                  7
                                        Democratic Patriotic Block                                             2                  2
                                        United List                                                            2                  2
                                        Party for Bosnia                                                       2                  2
                                        Serb Party of Krajina                                                  1                  1
                                        Serb Patriotic Party                                                   1                  1
                                        Total                                                                 83                 98
                                        Note: Percent does not add to 100 due to rounding.

                                        Source: OSCE election data.




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Appendix IV

Bosnia’s Priority Reconstruction and
Recovery Program

                                Bosnia’s Priority Reconstruction and Recovery Program is providing the
                                framework for simultaneously carrying out economic reconstruction, the
                                development of governmental structures, and the transition from socialism
                                to a market economy. The three main objectives are to (1) provide
                                sufficient financial resources to initiate a broad-based rehabilitation
                                process that will jump-start economic recovery and growth; (2) strengthen
                                and rebuild government institutions; and (3) support, in parallel, the
                                transition to a market economy.


                                In 1996, 59 donor countries and organizations pledged $1.9 billion and
Donor Pledges and               committed even more, $2.03 billion, in support of the reconstruction effort
Commitments                     in Bosnia. The 12 largest donors contributed $1.7 billion, about 84 percent,
                                of the total commitments of $2.03 billion.17 The largest individual donor is
                                the European Commission, committing a total of $430.21 million, followed
                                by the World Bank ($357.8 million), the United States ($294.40 million),
                                Japan ($107.7 million), the Netherlands ($100 million), and the European
                                Bank for Reconstruction and Development ($89.31 million). (See
                                table IV.1.)

Table IV.1: Donor Pledges and
Commitments for Bosnia’s        Dollars in millions
Reconstruction Program, as of                                                                        Total               Total
December 1996                   Donor                                                              pledge         commitments
                                European donors
                                European Commission                                               $367.10                $430.21
                                Albania                                                               0.02                    0.02
                                Austria                                                              11.50                  23.07
                                Belgium                                                               7.57                    7.28
                                Bulgaria                                                              0.01                    0.03
                                Croatia                                                               0.50                    7.50
                                Czech Republic                                                        6.00                    6.42
                                Denmark                                                               5.10                    9.63
                                Estonia                                                               0.07                    0.07
                                Federal Republic of Yugoslavia (Serbia and
                                  Montenegro)                                                        10.00                  11.70
                                Finland                                                               5.00                    8.94
                                France                                                                9.29                  13.19
                                Germany                                                              39.25                  51.49
                                                                                                                      (continued)
                                17
                                 According to the November 1996 donor report, all the information on implementation progress has
                                been provided by the donors. There are information gaps, and figures should be considered best
                                estimates.



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Bosnia’s Priority Reconstruction and
Recovery Program




Dollars in millions
                                                       Total             Total
Donor                                                pledge       commitments
Greece                                                  7.00               7.00
Hungary                                                 1.00               1.00
Iceland                                                 1.60               1.60
Ireland                                                 6.00               6.20
Italy                                                  63.65              70.70
Latvia                                                  0.09               0.11
Lithuania                                               0.07               0.08
Luxembourg                                              3.23               2.87
Macedonia                                               0.10               0.10
Netherlands                                           100.02             100.00
Norway                                                 40.76              42.40
Poland                                                  2.90               3.00
Portugal                                                1.00                 NA
Romania                                                 0.21               0.21
Russia                                                 50.00                 NA
San Marino                                              0.14               0.23
Slovakia                                                1.50               1.50
Slovenia                                                2.89               3.19
Spain                                                  17.50              14.40
Sweden                                                 30.40              38.50
Switzerland                                            33.50              31.87
United Kingdom                                         39.70              57.75
Council of Europe Social
 Development Fund                                       5.00               5.00
Subtotal                                              869.67             957.26
Islamic countries
Organization of the Islamic Conference                  3.00               3.00
Brunei                                                  2.00              18.70
Egypt                                                   1.00               1.03
Indonesia                                               2.10               2.08
Jordan                                                  1.37                 NA
Kuwait                                                 35.00              21.15
Malaysia                                               12.00              12.00
Qatar                                                   5.00               5.00
Saudi Arabia                                           50.00              50.00
Turkey                                                 26.50              46.50
Subtotal                                              136.60             159.46
                                                                     (continued)


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Bosnia’s Priority Reconstruction and
Recovery Program




Dollars in millions
                                                                   Total               Total
Donor                                                            pledge         commitments
Other non-European countries
Australia                                                           1.13                   1.13
Canada                                                             25.44                  22.71
Japan                                                             136.70                 107.70
Republic of Korea                                                   1.00                   1.00
United States                                                     281.70                 294.40
Subtotal                                                          365.97                 426.94
International financial institutions
European Bank for Reconstruction and
  Development                                                      80.21                  89.31
Islamic Development Bank                                           15.00                  19.00
World Bank                                                        330.00                 357.80
Subtotal                                                          425.21                 466.11
Other multilateral donors
International Committee of the Red Cross                            1.50                   1.50
International Fund for Agricultural Development                     7.30                   7.32
United Nations Development Program                                  2.00                   0.64
World Health Organization                                           1.18                   1.88
Subtotal                                                           11.98                  11.34
Private Donors
Soros Foundation                                                    5.00                   5.96
Subtotal                                                            5.00                   5.96
Total                                                         $1,895.80              $2,026.87

Legend:

NA = Not available

Source: Implementation of the Priority Reconstruction Program in 1996, prepared by the
European Commission and the Central Europe Department of the World Bank (Mar. 1997).



A number of donors have transferred part of their contributions to trust
funds administered by international agencies, including international
financial institutions. As of December 1996, these funds totaled
$191.8 million, or about 9 percent of the total commitments. These funds
administered by international agencies include $145.07 million that are
grant funds to Bosnia in a trust fund with the World Bank.




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                    Bosnia’s Priority Reconstruction and
                    Recovery Program




                    Progress in the reconstruction effort can be measured by how much of the
Sectoral Progress   firmly committed funds had been disbursed (see table IV.2).18 As of
                    December 1996, $1,104 million, or 58 percent of the $1,904 million in firmly
                    committed funds for 1996, had been disbursed. This disbursal rate
                    exceeded the reconstruction program’s year-end disbursement target of
                    about $950 million (about half the pledged funding).




                    18
                      According to the November 1996 donor report, “disbursed funds” are those transferred to an account
                    in the name of a Bosnian agency, or a disbursement agency (foreign or local) in Bosnia, and include
                    expenditures made against works, goods, and service contracts, for balance of payments, and
                    advanced for the purpose of payment of contractors. In-kind assistance is considered disbursed once
                    provided. “Firmly committed funds” are those funds that have been approved by national legislative
                    bodies or boards of multilateral agencies and allocated to specific activities.



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                                         Bosnia’s Priority Reconstruction and
                                         Recovery Program




Table IV.2: 1996 Program Requirements, Commitments, and Disbursements by Sector for the Bosnia Priority
Reconstruction Program, as of December 1996
Dollars in millions
                                                                                                                             Disbursements
                                                 Program                       Firm       Disbursements                       as a % of firm
Sector                                       requirements               commitments as of December 1996                       commitments
Reconstruction Sectors
Agriculture                                              $97                         $73                        $56                         77%
Education                                                 72                         104                          55                        53
Employment generation                                     75                          54                          15                        28
Energy                                                   403                          84                        165                         (58)
  (District heating and natural gas)                    (141)                        (53)                       (33)                        (62)

  (Electric power and coal                              (262)                       (231)                      (132)                        (57)

Govt. and social support                                  75                         128                          76                        59
Health                                                   145                         111                          49                        44
Housing                                                  165                         302                        184                         61
Industry and finance                                     120                         192                          77                        40
Landmine clearing                                         70                          51                          24                        47
Telecommunications                                       160                          37                          15                        41
Transport                                                317                         192                          91                        47
Water and waste management                               140                          96                          47                        49
Subtotal                                               1,839                      1,624                         854                         53
Peace implementationa                                       •                        132                        115                         87
                       b
Balance of payments                                         •                        148                        135                         91
Total                                                $1,839                      $1,904                      $1,104                         58%
                                         a
                                          Peace implementation activities, a majority of which have taken place on an interentity basis,
                                         include support for elections, media, and the local police. These activities, while essential to
                                         provide the necessary conditions for reconstruction and recovery to take place, are not
                                         considered part of the framework of the Bosnia Priority Reconstruction Program.
                                         b
                                          Balance-of-payments support is provided to the government of Bosnia for reserve build-up for
                                         imports and the start-up of a currency board. The counterpart funds of balance-of-payments
                                         support can be used by the government to finance overall fiscal needs, including recurrent costs
                                         in different sectors and other reconstruction-related expenditures.

                                         Source: Implementation of the Priority Reconstruction Program in 1996.




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                                       Bosnia’s Priority Reconstruction and
                                       Recovery Program




                                       Table IV.3 provides information on the objectives of the program’s
Sector Objectives                      12 sectors.

Table IV.3: Sector Objectives of the
Reconstruction Program                 Sector                         Objective
                                       Agriculture                    Ensure the availability of imported critical inputs and
                                                                      equipment, including key seasonal inputs, farm
                                                                      equipment and livestock, and seeds; rehabilitate critical
                                                                      sectors with potential for export, including high-value
                                                                      orchards and vineyards, forestry activities, and wood
                                                                      processing.
                                       Education                      Ensure that classrooms are minimally supplied with
                                                                      textbooks and educational materials for students and
                                                                      teachers; reconstruct highly damaged primary and
                                                                      general secondary schools to make them functional
                                                                      quickly; strengthen capacities for education
                                                                      administration at all levels.
                                       Employment generation          Create rapid employment for those unemployed as a
                                                                      result of the war; rehabilitate small-scale public
                                                                      infrastructure and clean up war-damaged public property
                                                                      and assets; reinforce the decision-making role of
                                                                      municipality governments in municipal infrastructure
                                                                      project design and management; and deliver immediate
                                                                      visible impact at the local level.
                                       Energy Heating and natural     Restore district heating service in Sarajevo and enhance
                                       gas                            system efficiency and the commercial performance of the
                                                                      district heating entity; reduce Bosnia’s dependence on
                                                                      natural gas by providing dual gas/light oil firing capability.
                                       Electric power and coal        Restore electric service to acceptable levels in major
                                                                      cities and for vital industries; increase coal production to
                                                                      supply fuel required for thermal power plants; reconfigure
                                                                      the electric power network; and enhance institutional
                                                                      capacity and help restructure the electric power and coal
                                                                      sectors.
                                       Government and social          Develop and strengthen institutional capacity of key
                                       support                        government institutions, including salary supplements for
                                                                      national and Federation government staff and repairs to
                                                                      damaged government buildings in Sarajevo and Mostar;
                                                                      provide minimal social protection to ease severe hardship
                                                                      faced by vulnerable population groups.
                                       Health                         Prevent and control epidemics and communicable
                                                                      diseases through priority public health interventions;
                                                                      reconstruct and rehabilitate priority health infrastructure;
                                                                      rehabilitate war victims by addressing physical disability
                                                                      and psychological trauma; support recurrent
                                                                      expenditures, including salaries for health sector staff and
                                                                      purchases of essential generic drugs and supplies.
                                       Housing                        Create conditions to enable the return of refugees and the
                                                                      internally displaced; rapidly expand the usable housing
                                                                      stock for the entire population.
                                                                                                                        (continued)



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                  Bosnia’s Priority Reconstruction and
                  Recovery Program




                  Sector                            Objective
                  Industry and finance              Stimulate sustainable growth and employment by making
                                                    loans to small- and medium-sized enterprises; help
                                                    enterprises restore trade links; facilitate expansion of
                                                    financial intermediation and stimulate the
                                                    saving-investment process.
                  Landmine clearing                 Make land available for use by clearing identified mine
                                                    fields and surveying systematically “priority areas” to
                                                    remove most of the uncertainty on the mine situation, and
                                                    prevent mine-related accidents.
                  Telecommunications                Restore and modernize critical parts of the existing
                                                    networks; establish a global system for mobile
                                                    communications; support institution building and provide
                                                    technical assistance on legal and regulatory matters.
                  Transport                         Reconstruct and repair urgent, high- priority links and
                                                    services in the transport system, particularly roads,
                                                    bridges, tunnels, the railways, Sarajevo airport, and urban
                                                    transport.
                  Water and waste                   Restore water, sewerage, solid waste disposal, flood
                  management                        control, and irrigation systems to prewar levels; establish
                                                    the proper institutional arrangements to make the
                                                    improvements sustainable.

                  Source: The Priority Reconstruction Program, and Priority Reconstruction Projects Update, World
                  Bank (Washington, D.C.: The World Bank, Sept. 1996).




                  Reconstruction efforts have focused primarily on the Federation, which
Geographic        had received $1.1 billion, or 81 percent of the funds under implementation
Distribution of   ($1.36 billion) as of December 1996.19 The amount disbursed to the
Reconstruction    Federation, $868 million, represented 46 percent of the funds firmly
                  committed to the 1996 reconstruction program ($1.904 billion).
Activities        Disbursements to Republika Srpska were $35 million, or 1.8 percent. (See
                  table IV.4.)




                  19
                   According to the December 1996 donor report, amounts “under implementation” are those firmly
                  committed funds for which contracts have been tendered, signed, or are under way (including
                  amounts disbursed).



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                                          Bosnia’s Priority Reconstruction and
                                          Recovery Program




Table IV.4: Distribution of Implemented
and Disbursed Funds by Entity as of       Dollars in millions
December 1996                                                                                                       Disbursement as
                                                                                    Under                            percent of 1996
                                          Entity                            implementation          Disbursements firm commitments
                                          Federation                                   $1,098                      $868          45.6
                                          Republika Srpska                                  43                      35            1.8
                                          National and interentity                        219                      201           10.6
                                          Total                                        $1,360                 $1,104             58.0
                                          Source: Implementation of the Priority Reconstruction Program in 1996.



                                          Of the $868 million disbursed to the Federation, $455 million could be
                                          identified by cantonal allocation. As of December 1996, the
                                          Bosniak-majority cantons had received $323 million, or 17 percent of the
                                          1996 commitments; Croat-majority cantons had received $25 million, or
                                          1.3 percent; mixed cantons had received $107 million in disbursed funds,
                                          or 5.6 percent. The remaining $413 million, or 21.7 percent, includes
                                          amounts that benefited more than one canton and amounts for which
                                          more specific information was not available. (See table IV.5.)

Table IV.5: Distribution of
Disbursements in the Federation by        Dollars in millions
Canton and Ethnic Composition, as of                                                                              Disbursements as
December 1996                                                                                                       a percent of 1996
                                          Canton                            Ethnic majority         Disbursements firm commitments
                                          Canton
                                          Una-Sana (Bihac region)           Bosniak                                $23            1.2
                                          Posava                            Croat                                    9            0.5
                                          Tuzla-Podrinje                    Bosniak                                 79            4.1
                                          Zenica-Doboj                      Bosniak                                 75            3.9
                                          Gornjedrinski (Gorazde)           Bosniak                                 13            0.7
                                          Central Bosnia (Travnik-Vitez) Mixed                                      32            1.7
                                          Neretva (Mostar- Konjic)          Mixed                                   75            3.9
                                          West Herzegovina                  Croat
                                          (Posusje-Grude)                                                            8            0.1
                                          Sarajevo                          Bosniak                                133            7.0
                                          West Bosnia (Glamoc-              Croat
                                          Tomislavgrad)                                                              8            0.4
                                          Subtotal                                                                 455           23.9
                                          Multicanton                                                              413           21.7
                                          Total                                                                    $868          45.6
                                          Source: Implementation of the Priority Reconstruction Program in 1996.




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                       Bosnia’s Priority Reconstruction and
                       Recovery Program




                       According to the November 1996 donor report, the strategy for the 1997
Reconstruction         program continues to reflect the three broad objectives of the 1996
Program Strategy for   program, though with a focus on reconstruction in contrast to the first
1997                   year’s focus on emergency assistance. The strategy for 1997, from
                       emergency to sustainability, includes four priorities: (1) continued
                       rehabilitation of physical and social infrastructure; (2) support of refugee
                       return, with an emphasis on an integrated approach covering housing, job
                       creation, and basic infrastructure; (3) employment generation through
                       private and financial sector development; and (4) support of sustainable
                       budgets and transition policies, and a strengthening of government
                       institutions. The external financing target for 1997 is $1.4 billion.




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Appendix V

U.S. Civilian Programs in Support of the
Bosnia Peace Operation, Fiscal Year 1996

                                       This appendix contains fiscal year 1996 obligation and programmatic
                                       information on U.S. civilian assistance programs to Bosnia. These
                                       programs are categorized into four areas: economic reconstruction,
                                       humanitarian aid, democracy and human rights programs, and other
                                       support for civilian organizations in the peace operation (see table V.1).
                                       The programs were funded and/or implemented by the U.S. Agency for
                                       International Development (USAID); the U.S. Information Agency (USIA); the
                                       Defense Security Assistance Agency; the Trade and Development Agency;
                                       and the Departments of State, Agriculture, Commerce, Justice, Labor,
                                       Health and Human Services, and the Treasury.

Table V.1: U.S. Funding for Civilian
Aspects of Bosnia Peace Operation,     Dollars in millions
Fiscal Year 1996                                                                              Fiscal year-end
                                       Program/activity                                             estimatea        Obligations
                                       Economic reconstruction
                                       Municipal infrastructure and services                            $79.3              $75.0
                                       Reconstruction finance                                            68.0               46.5
                                       Economic stabilization and institution- building                  23.0               16.8
                                       Demining                                                           8.5                 9.4
                                       Gorazde road                                                       3.0                 3.0
                                       Commercial opportunities                                           2.0                 1.1
                                       Subtotal                                                         183.8              151.8
                                       Humanitarian assistance
                                       Food assistance                                                   99.2               98.3
                                       Refugee assistance                                                84.3               84.3
                                       Emergency humanitarian assistance                                 40.3               34.1
                                       Emergency shelter program                                         29.0               25.7
                                       Commission on the Missing                                          0.7                 0.7
                                       Subtotal                                                         253.5              243.1
                                       Democracy and human rights
                                       Police training and equipmentb                                    20.0                 3.9
                                       War crimes tribunal                                               11.7               10.9
                                       OSCE elections programsc                                          13.1               14.2
                                       Democratic reforms                                                 6.9               11.3
                                       Open Broadcast Network                                             2.0                 2.0
                                       Training and exchanges                                             1.7                 2.1
                                       UNICEF programs                                                    1.0                 2.0
                                       IMET                                                               0.2                 0.3
                                       Subtotal                                                          56.6               46.7
                                                                                                                      (continued)




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                           Appendix V
                           U.S. Civilian Programs in Support of the
                           Bosnia Peace Operation, Fiscal Year 1996




                           Dollars in millions
                                                                                       Fiscal year-end
                           Program/activity                                                  estimatea              Obligations
                           Other support for civilian programs/activities
                           IPTF monitors                                                             55.7                     47.6
                           USAID operating expenses and other costs                                    5.0                     5.3
                           Office of the High Representative                                           3.0                     3.0
                           OSCE mission assessment                                                     2.2                     3.8
                           Subtotal                                                                  65.9                     59.7
                           Total                                                                  $559.8                  $501.3d

                           Legend

                           OSCE = Organization for Security and Cooperation in Europe
                           UNICEF = United Nations Children’s Fund
                           IMET = International Military Education and Training program
                           IPTF = International Police Task Force
                           a
                           As of October 1996.
                           b
                            The fiscal year-end estimate includes costs for police training in the eastern Slavonia area of
                           Croatia because the estimates provided by the State Department did not separate them from
                           assistance to Bosnia. The obligation amount is for Bosnia only.
                           c
                            USAID’s support to OSCE for election activities is included in the democratic reforms category
                           because the obligation data provided by USAID did not allow us to separate out OSCE support
                           from other USAID democracy projects.
                           d
                            The Department of Labor and Health and Human Services also obligated negligible amounts for
                           programs in Bosnia during fiscal year 1996.




Economic
Reconstruction

Municipal Infrastructure   In fiscal year 1996 USAID obligated $75 million for the Municipal
and Services               Infrastructure and Services program, which will provide a total of
                           $182 million to finance community infrastructure projects over 4 years.
                           The program is to help stabilize Bosnian communities damaged by the
                           war, primarily in the U.S. military sector and in Sarajevo; support the
                           return of displaced persons and demobilized soldiers to their homes; and
                           reactivate the local economy. Municipal infrastructure projects were
                           collocated in communities benefiting from USAID’s Emergency Shelter
                           Program and reconstruction finance loans.




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                         Appendix V
                         U.S. Civilian Programs in Support of the
                         Bosnia Peace Operation, Fiscal Year 1996




                         According to USAID, as of the end of February 1997, the Municipal
                         Infrastructure and Services program had approved 39 projects totaling
                         $49.1 million and had generated about 1,000 short-term jobs. The
                         program’s 15 power projects totaled $32.5 million, or 66 percent of the
                         dollar amount of approved projects. The remainder of the projects were
                         distributed among the transport, education, water, and health sectors.
                         According to USAID project estimates, the power repair projects will benefit
                         more than 500,000 people in 17 towns and villages; in the transport sector,
                         the repair of roads and bridges will benefit 3,000 homes and 10,000
                         residents; municipal water system repairs will impact 175,000 people; and
                         repairs to schools will benefit 5,300 students.

                         A subactivity of the Municipal Infrastructure and Services Program, the
                         Community Infrastructure Rehabilitation Project (CIRP), is being
                         administered by SFOR in the U.S. military sector of Bosnia. The subactivity
                         was created to provide employment for demobilized Bosnian soldiers,
                         both in the Federation and Republika Srpska (within the U.S. military
                         sector), and to accelerate economic and social rehabilitation at the
                         community level in order to stimulate the return of displaced persons. CIRP
                         consists of small-scale, community-level, labor-intensive projects that can
                         be quickly implemented for immediate impact. SFOR identifies, monitors,
                         and reports on the projects, while the USAID mission in Bosnia approves
                         them. According to USAID, as of late February 1997, USAID had approved 113
                         CIRP projects—73 in the Federation and 40 in Republika Srpska—totaling
                         $4.7 million and designed to generate 4,700 jobs. Seventy-two CIRP projects
                         had been completed by February 1997. The SFOR Commander in the U.S.
                         military sector views these small-scale projects as a means of ensuring
                         force protection; they help SFOR troops develop better relations with local
                         communities.


Reconstruction Finance   USAID obligated $46.5 million for the Bosnian Reconstruction Finance
                         Facility program,20 a 5-year, $278-million lending program. The program’s
                         primary objective is to help jump-start the economy and increase the
                         employment of the general population, refugees, and demobilized soldiers.
                         As part of these efforts, the program is providing balance-of-payments
                         assistance to Bosnia for needed imports and commercial credit to small-
                         and medium-sized businesses in the form of quickly disbursed loans. In
                         addition, the program is assisting local enterprises in the preparation of
                         loan applications and is providing technical assistance and training to

                         20
                          The facility is staffed by bankers and accountants from the United States and provides
                         nonconcessional loans, with repayments to be used for further lending under the program.



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                           U.S. Civilian Programs in Support of the
                           Bosnia Peace Operation, Fiscal Year 1996




                           commercial bankers. Priority is being given to borrowers in the U.S.
                           military sector in Bosnia, including Tuzla and Zenica, and in Sarajevo and
                           to equitable distribution of credit along ethnic lines.

                           As of March 1997, this program had approved 57 loans totaling
                           $32.3 million, with 52 more applications in the pipeline, and had disbursed
                           $27.7 million. About 7,500 jobs were created by these loans. The average
                           loan amount was about $560,000 for businesses such as clothes and shoes
                           manufacturing; baked goods, fruit juice, and dairy production; furniture
                           manufacturing; construction; agriculture; and pharmaceuticals.


Economic Stabilization     In fiscal year 1996 USAID obligated $16.8 million including $1.2 million
and Institution-Building   transferred to the Treasury Department for economic stabilization and
                           institution building. USAID and the Treasury developed their programs in
                           collaboration with the International Monetary Fund and the World Bank
                           who have primary responsibility for economic stabilization and recovery
                           in Bosnia.

                           USAID’s assistance is designed to help the government of Bosnia ensure that
                           external assistance is provided within a macroeconomic framework of
                           sound monetary and fiscal management. There are six technical assistance
                           components to USAID’s macroeconomic stabilization program:
                           (1) macroeconomic assistance to help the Bosnian government manage
                           the large balance-of-payments inflows from donor governments;
                           (2) commercial bank training and advice for commercial bankers in
                           market-oriented credit policies, procedures, and operations as well as
                           other critical financial services and risk management; (3) bank supervision
                           advice for operations and institutional development of the Federation
                           Banking Agency; (4) assistance to Bosnian businesses seeking to access
                           Bosnian Reconstruction Finance Facility loans and other donor credit
                           programs—specifically, helping them to develop loan applications and
                           business plans and to improve business operations; (5) assistance, in
                           conjunction with the European Union, in the establishment of a customs
                           training center and in the design and implementation of training programs
                           for Bosnian customs officials; (6) assistance to accelerate privatization by
                           training Federation and cantonal officials in privatization strategies and
                           enterprise preparation.

                           The Treasury’s Office of Technical Assistance is helping the national and
                           entity governments, primarily the Federation Ministry of Finance, in the
                           areas of tax, budget, debt, banking, and infrastructure finance. During



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           Appendix V
           U.S. Civilian Programs in Support of the
           Bosnia Peace Operation, Fiscal Year 1996




           1996, Treasury helped the Federation Ministry of Finance get established
           and helped to develop working relations between the Bosnian Croat
           Minister, the Bosniak Deputy, and their respective staff. Treasury tax
           advisors have been assisting the Federation Ministry of Finance in
           (1) writing tax law and implementing new tax systems, (2) developing a
           revenue analysis unit to understand the implications of tax law and
           revenue allocation for the financing of different levels of government, and
           (3) developing a tax administration system. The primary objective of the
           Treasury’s budget assistance to the Federation has been to create a
           transparent budget process by (1) assisting the Federation Ministry of
           Finance in devising the processes and procedures for developing a budget
           and techniques for budget analysis and (2) assisting the ministry staff in
           the revision of the budget law.

           The Treasury’s role in external debt has been to give advice to (1) the
           national government as it prepares for negotiations on restructuring
           bilateral official and commercial debt and (2) the entities on
           complementary procedures and laws to ensure that their constitutional
           requirement to provide debt service is met. In the banking sector, the
           Treasury’s main focus has been the reform and privatization of the
           banking system. The Treasury has also provided technical assistance to
           the national and entity governments to support the Dayton Agreement’s
           provisions for joint institutions to own, rebuild, rebuild, finance, and
           operate certain major infrastructure items. According to Treasury officials,
           progress has recently been greatest in restoring rail communications.


Demining   The State Department obligated $9.4 million in fiscal year 1996 for
           demining efforts. These funds were for (1) the start-up of the United
           Nations Mine Action Center, the information clearinghouse and training
           center for mine clearance and mine awareness activities; (2) training and
           staffing of mine survey teams; and (3) three demining teams
           headquartered out of Tuzla, Banja Luka, and Mostar. In the fall of 1996, the
           teams started clearing mines with the goal of returning land to the local
           population for resettlement, economic expansion, agricultural
           development, and a safe living and working environment. As of
           February 4, 1997, the State Department contractor had cleared or certified
           as cleared 570,000 square meters of land, thereby returning back to
           productive use such areas as hospitals, schools, airports, power lines,
           agricultural areas, and places used by local people for transit.




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                           Appendix V
                           U.S. Civilian Programs in Support of the
                           Bosnia Peace Operation, Fiscal Year 1996




Gorazde Road               In fiscal year 1996 USAID transferred $3 million to DOD for the Gorazde road
                           improvement project. This road was called for in the Dayton Agreement.
                           This project was aimed at improving the 61 kilometers of road between
                           Gorazde and Sarajevo and was implemented by the U.S. Army.


Commercial Opportunities   USAID transferred $2.0 million to the U.S. Trade and Development Agency
                           and the Commerce Department in fiscal year 1996 for activities in this
                           category, of which $1.1 million was obligated. The Trade and Development
                           Agency provided air traffic control training and funded three engineer
                           advisors in the areas of transportation, utilities, and energy. The
                           Commerce Department funded the start-up of a Central and Eastern
                           European Business Information Center in Bosnia.



Humanitarian
Assistance

Food Assistance            In fiscal year 1996, the Department of Agriculture funded and USAID
                           obligated $98.3 million under the title II, Public Law 480 program, which
                           provided foodstuffs such as wheat, flour, vegetables, cornmeal, beans, and
                           rice to the people of Bosnia.


Refugee Assistance         The State Department’s Bureau of Population, Migration and Refugees
                           obligated $84.3 million in grants to assist Bosnian refugees and displaced
                           persons. About $57 million of this amount was provided to UNHCR, about
                           $11.7 million was provided to the International Committee of the Red
                           Cross, about $4.1 million was provided to International Rescue
                           Committee, and the remaining $11.5 million was provided to nine other
                           nongovernmental organizations.


Emergency Humanitarian     USAID’sOffice of Foreign Disaster Assistance provided $34.1 million in
Assistance                 other emergency assistance to Bosnians. This assistance consisted of
                           clothing, fuel, food, health assistance, and other critical items needed for
                           survival until economic recovery activities take hold.


Emergency Shelter          USAID obligated $25.7 million for the Emergency Shelter Program in fiscal
Program                    year 1996. The objective of this program, which complemented USAID


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                      Appendix V
                      U.S. Civilian Programs in Support of the
                      Bosnia Peace Operation, Fiscal Year 1996




                      economic reconstruction projects, was to accelerate the return of Bosnian
                      displaced families and refugees to their homes and to stimulate economic
                      activity by doing limited emergency repairs on single-family houses for
                      approximately 2,500 families. The program aimed to simultaneously
                      revitalize communities and economic life, by focusing on villages rather
                      than isolated homes and by generating at least 2,000 short-term jobs.

                      As of December 1996, about 2,550 houses for 12,500 people were repaired
                      under the Emergency Shelter Program, figures exceeding the program
                      goal. The program also resulted in the creation of 2,000 jobs. According to
                      a USAID official, the Emergency Shelter Program did not have serious
                      problems primarily because it generally did not attempt to bring people
                      back home across ethnic lines.

                      A micro-infrastructure program was also implemented under the auspices
                      of the Emergency Shelter Program. The purpose of this program was to
                      help consolidate the positive effects of the program by repairing and
                      restoring essential services and utilities to selected villages. According to
                      USAID, the program repaired 15 water systems, 14 schools, 4 health clinics,
                      and 2 electricity systems.


Commission on the     The State Department provided $700,000 in fiscal year 1996 for the
Missing               International Committee of the Red Cross’s International Commission on
                      Missing Persons in the Balkans. This commission used the funds to
                      (1) exhume bodies of atrocity victims, (2) set up clearinghouse facilities on
                      missing persons in Sarajevo, and (3) prepare for its first major planning
                      meeting to be held in Geneva, Switzerland, in October 1996.



Democracy and
Human Rights

Police Training and   The State Department had planned to provide $20 million in fiscal year
Equipment             1996 funds to assist (1) the U.N. peacekeeping operation in Croatia, known
                      as the U.N. Transitional Administration in Eastern Slavonia, to establish,
                      train, and equip the new transitional police force; and (2) IPTF to train and
                      equip local police forces in Bosnia.21 In conjunction with the United States,
                      IPTF had designed and solicited contributions for a 2-year,


                      21
                        A breakout of estimated costs for activities in Bosnia and Croatia was not available.



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Appendix V
U.S. Civilian Programs in Support of the
Bosnia Peace Operation, Fiscal Year 1996




$100-$200 million program to train and equip Bosniak, Bosnian Croat, and
Bosnian Serb local police forces as a way of implementing IPTF’s police
reform efforts.22 However, as of November 1996, only $3.9 million had
been obligated by the State Department for police assistance in
Bosnia—$3 million for training and technical assistance provided by the
Justice Department’s International Criminal Investigative Training
Assistance Program and about $900,000 for other purposes—because the
restructuring in the three police forces was slower than expected and
there were very few people to train.

During fiscal year 1996, the Justice Department provided technical
assistance and training for IPTF and Federation police executives. Among
other things, the department’s technical assistance helped IPTF in assessing
the potential for police reform in Bosnia and in developing its standard
operating procedures. Further, in conjunction with IPTF, and at the State
Department’s request, the Justice Department developed a mobile training
program that oriented about 1,700 IPTF personnel to standardize their
operational procedures in the daily performance of their jobs. Prior to the
September 1996 election, it also provided training to 109 IPTF station
commanders on election monitoring and the basics of democratic policing
during an election. Station commanders then taught these subjects to IPTF
monitors, who in turn instructed local police.

The Justice Department also helped plan and fund two executive seminars
for Federation police executives. One seminar was held in Germany during
August 1996; the second was held in the United States during
December 1996. The seminars helped familiarize senior police and
ministry of interior executives with democratic policing standards. During
the second seminar, the executives developed a first draft of
implementation plans for restructuring police forces in their respective
cantons that are consistent with internationally recognized standards of
democratic policing.

The State Department directly provided $900,000 in assistance to local
police and IPTF. About half of this amount directly supported for the local
police force in the Sarajevo canton; the remainder was to provide
technical assistance to the IPTF in developing its standard operating
procedures, reviewing existing police structures, identifying specific local
police training and equipment needs, and assessing the compatibility of
local laws.

22
  According to a State Department official, the U.S. government provides training and technical
assistance to Bosnia’s local police and to IPTF on a bilateral basis. The United States does not transfer
funds to either the United Nations or IPTF for these purposes.



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                          Appendix V
                          U.S. Civilian Programs in Support of the
                          Bosnia Peace Operation, Fiscal Year 1996




                          As of March 25, 1997, the United States had not provided any training or
                          equipment to Republika Srpska police. According to a State Department
                          official, U.S. policy is to withhold training and equipment until Republika
                          Srpska authorities formally commit to police restructuring, including
                          identification and vetting of officers for human rights violations, in
                          accordance with democratic policing standards.


War Crimes Tribunal       In fiscal year 1996, the State Department obligated $10.9 million for the
                          administrative expenses of the war crimes tribunal.


OSCE Elections Programs   The State Department provided $14.2 million to support the OSCE’s
                          electoral activities in Bosnia during 1996. Most of this money went directly
                          to OSCE in the form of a nonearmarked cash grant. In general, the grant
                          covered OSCE’s office expenses and activities related to administering the
                          September 1996 election, including the printing of voter education
                          materials.


Democratic Reforms        USAID obligated $11.3 million for a variety of democracy projects designed,
                          in general, to assist in the development of a multiethnic Bosnia based on
                          rule of law and democratic principles. About $6.3 million of this amount
                          was obligated by USAID’s Office of Transition Initiatives for
                          democracy-building and elections-related grants. Operating out of four
                          locations in Bosnia, this office directly provided about 260 small grants as
                          of March 1997 to local media and civic advocacy groups in the Federation
                          and Republika Srpska, in an effort to give a greater voice to organizations
                          that support Dayton goals. USAID’s bureau for Europe and the New
                          Independent States also obligated about $5 million for democratic
                          reforms. These funds paid for contract personnel who staffed OSCE’s
                          election unit, including the Director General position, which administered
                          and implemented the September 1996 election. USAID funds were also
                          provided to organizations that (1) helped develop political parties prior to
                          the election, (2) provided voter and civic education, (3) worked to
                          strengthen independent media, and (4) sought to improve budgetary and
                          financial management in the Federation’s cantons and municipalities.


Open Broadcast Network    USIA obligated $2 million for the establishment of the Open Broadcast
                          Network,23 which was intended by its international donors to provide

                          23
                            These funds were transferred to USIA from USAID.



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                            Appendix V
                            U.S. Civilian Programs in Support of the
                            Bosnia Peace Operation, Fiscal Year 1996




                            greater coverage, improved programming, and broader public access to
                            the media than was available under government-controlled programming.
                            This effort included upgrading five independent television stations.


Training and Exchanges      USIA obligated $2.1 million for training in Bosnia and in the United States.
                            Programs in this category included the Ron Brown Fellowships for
                            graduate studies, internships in the United States, international visitor
                            programs, civics education, and Voice of America broadcasts. USIA used
                            some of these funds to conduct its public opinion polls in Bosnia.


United Nations Children’s   USAID contributed $2 million to UNICEF programs in Bosnia. It granted
Fund Programs               $1 million in support of the crisis education fund for rebuilding the
                            primary education system in Bosnia, where over 50 percent of schools
                            suffered major damage or destruction due to war. It also granted
                            $1 million in support of UNICEF’s primary immunization program for
                            children.


IMET                        In fiscal year 1996, the United States provided about $300,000 in IMET
                            training for the Federation military.24 These funds paid for two English
                            language labs in Bosnia, as well as English language instructor training
                            and English language training in the United States for seven Federation
                            military personnel. It also funded the followon training of five of the seven
                            officers at U.S. military education institutions.



Other Support to
Civilian
Programs/Activities

IPTF Monitors               The State Department obligated $47.6 million for the IPTF mission in
                            Bosnia, which monitors, advises, and provides training for Bosnia’s law
                            enforcement personnel. The IPTF also works with local authorities in
                            restructuring police in accordance with democratic policing standards and

                            24
                              The IMET program is jointly managed by the State Department and DOD. The Secretary of State is
                            responsible for the program’s general direction, recommends funding levels for congressional
                            approval, and allocates approved funds to each country. The Secretary of Defense is responsible for
                            planning and implementing the program, including administration and monitoring, within established
                            funding levels.



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                           Appendix V
                           U.S. Civilian Programs in Support of the
                           Bosnia Peace Operation, Fiscal Year 1996




                           investigates human rights abuses by police. This category includes
                           $28.7 million for the U.S.-assessed share of the U.N. Mission in Bosnia and
                           Herzegovina, the majority of which went to fund IPTF. It also includes
                           $l8.9 million in voluntary contributions that funded about 170 U.S. police
                           monitors who served in the IPTF mission in Bosnia.25


USAID Operating            USAID obligated $5.3 million in fiscal year 1996 for project design, planning,
Expenses and Other Costs   audit, and other support for its Bosnia programs, including $3.5 million in
                           operating expenses. We included these salary and overhead charges
                           because they were identified by the executive branch in its fiscal year 1996
                           supplemental request as being specifically for the peace operation in
                           Bosnia.


Office of the High         In fiscal year 1996, the State Department obligated $3 million for
Representative             administrative support to the Office of the High Representative. This office
                           was established to facilitate the efforts of the parties in implementing the
                           Dayton Agreement and to mobilize and coordinate the activities of civilian
                           organizations participating in the peace operation.


OSCE Mission Assessment    The State Department obligated $3.8 million for the OSCE mission
                           assessment that covers the cost of OSCE’s human rights and arms control
                           activities.




                           25
                             The number of U.S. police monitors in Bosnia varied throughout the year.



                           Page 112                                              GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VI

Comments From the Department of Defense




              Page 113      GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VII

Comments From the U.S. Agency for
International Development




               Page 114     GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VII
Comments From the U.S. Agency for
International Development




Page 115                            GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VII
Comments From the U.S. Agency for
International Development




Page 116                            GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VII
Comments From the U.S. Agency for
International Development




Page 117                            GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VIII

Comments From the Department of State


Note: GAO comments
supplementing those in the
report text appear at the
end of this appendix.




                             Page 118   GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 1.




See comment 2.




                 Page 119                                GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 3.


See comment 3.


See comment 1.




See comment 4.




                 Page 120                                GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 5.




                 Page 121                                GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 3.




See comment 6.




                 Page 122                                GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 7.




                 Page 123                                GAO/NSIAD-97-132 Bosnia Peace Operation
                 Appendix VIII
                 Comments From the Department of State




See comment 8.




                 Page 124                                GAO/NSIAD-97-132 Bosnia Peace Operation
               Appendix VIII
               Comments From the Department of State




               The following are GAO’s comments on State’s letter dated April 28, 1997.
GAO Comments
               1. We do not underestimate the enormity of the task of implementing the
               Dayton Agreement, and we believe our report properly recognizes the
               difficulty of bringing peace to Bosnia. The full breadth of the overall
               challenge is described in chapter 1 and appendix I. Additional context is
               provided in chapters 2 through 5 as each area of the implementation of the
               Dayton Agreement is discussed. While our report makes every effort to
               present information and analysis of progress made thus far, we believe it is
               equally important to inform decisionmakers about problems and
               impediments encountered. Although one high level State official recently
               stated that one should always try to focus on the positive with regard to
               Bosnia, we believe that a realistic assessment that considers both the
               positive and negative has more value in helping decisionmakers to make
               informed decisions.

               2. We have not reprinted State’s line-by-line wording suggestions, but have
               incorporated them in the text where appropriate.

               3. We have addressed State’s comments on these matters on pages 11, 12,
               53, and 54 in this report.

               4. Our report acknowledges the progress that has been made in meeting
               the goals of the Dayton Agreement specifically mentioned by State.
               However, our review did not confirm that nearly all authorities of the
               former Republic and “Herceg-Bosna” governments have been devolved to
               the Federation. Instead, as discussed on page 46, we found that although
               the Federation was established in 1994, Bosniak and Bosnian Croat
               political leaders had made only limited progress toward the creation of the
               Federation—despite strong pressure from the United States and others.
               Moreover, even in those areas where progress has been made, care must
               be taken not to overstate the degree of success achieved, as State has done
               in some instances. For example, while national elections have been held
               and elected officials have taken office, the governmental institutions are
               not yet functioning. While progress is being made in rebuilding Bosnia’s
               infrastructure and economy, there are still severe impediments in many
               areas such as rail links and an integration of the telecommunications
               system.

               5. Chapter 2 of our report discusses the major achievements in this area.




               Page 125                                GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix VIII
Comments From the Department of State




6. See comment 3. While we do not disagree with State that the human
rights situation has improved when viewed in the long perspective, i.e.,
wholesale murder of thousands of civilians and mass ethnic cleansings are
no longer occurring as they did during the war, evidence indicates that a
deterioration did occur in the months following the September 1996
elections as compared with the months preceding it. We believe this
measure of the condition in Bosnia at this point is important because it
demonstrates efforts undertaken by nationalist political leaders to
consolidate their power and illustrates their level of commitment to key
provisions of the Dayton Agreement, including promoting democratic
practices and respect for human rights and ensuring the right of refugees
and displaced persons to return to their prewar homes.

7. Our report does not imply that the lack of donor coordination pertained
to U.S.-funded projects. Information on the appointment of an American as
the Deputy High Representative for Economic Reconstruction was added
to page 64 of the report.

8. While this may be the first time Federation and Republika Srpska
Refugee Ministers issued a statement expressing support for cross-ethnic
returns, it is not the first time such a pledge was made by Bosnia’s political
leaders. In signing the Dayton Agreement in December 1995, political
leaders of all three major ethnic groups pledged to ensure the right of
refugees and displaced persons to return to their prewar homes. As of
April 1997, none of these political leaders have fulfilled the agreement they
made in December 1995 with respect to allowing cross-ethnic returns, as
discussed in chapter 5 of our report.




Page 126                                 GAO/NSIAD-97-132 Bosnia Peace Operation
Appendix IX

Major Contributors to This Report


                        Lenora R. Fuller
National Security and   B. Patrick Hickey
International Affairs   David R. Martin
Division, Washington,   David C. Maurer
                        Judith A. McCloskey
D.C.                    Tetsuo Miyabara
                        RG Steinman




(711184)                Page 127              GAO/NSIAD-97-132 Bosnia Peace Operation
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