oversight

Bosnia Peace Operation: Progress Toward the Dayton Agreement's Goals--An Update

Published by the Government Accountability Office on 1997-07-17.

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

                          United States General Accounting Office

GAO                       Testimony
                          Before the Subcommittee on European Affairs, Committee
                          on Foreign Relations, U.S. Senate




For Release on Delivery
Expected at
2:00 p.m., EDT
                          BOSNIA PEACE
Thursday,
July 17, 1997             OPERATION

                          Progress Toward the
                          Dayton Agreement’s
                          Goals—An Update
                          Statement of Harold J. Johnson, Associate Director,
                          International Relations and Trade Issues, National
                          Security and International Affairs Division




GAO/T-NSIAD-97-216
          Mr. Chairman and Members of the Subcommittee:

          I am pleased to be here today to provide our evaluation of international
          efforts to promote an enduring peace in Bosnia and Herzegovina through
          the implementation of the 1995 Dayton Agreement. My statement is based
          on (1) our May 1997 report on the Bosnia peace operation,1 which
          provided the results of two visits to Bosnia in July and December 1996 and
          (2) information on evolving issues and progress we obtained during a visit
          to Bosnia in June 1997.


          The internationally-supported peace operation in Bosnia, part of a
Summary   longer-term peace process, has helped that country take important first
          steps toward achieving the Dayton Agreement’s goals. The North Atlantic
          Treaty Organization (NATO)-led forces have sustained an environment
          without active military hostilities. This has provided time for the peace
          process to move forward and has allowed the implementation of the
          agreement’s civil aspects to begin. Progress has been made in establishing
          some political and economic institutions, and economic recovery has
          started in the Federation. Nevertheless, the transition to a unified,
          democratic government that respects the rule of law has not occurred, due
          principally to the failure of Bosnia’s political leaders to fulfill their
          obligations under the Dayton Agreement and to promote political and
          social reconciliation. Despite the Dayton Agreement, many Bosnian Serb
          and Croat political leaders still embrace their wartime aims of controlling
          their own ethnically pure states separate from Bosnia. Bosnian Muslims,
          known as Bosniaks, continue to support a unified, multiethnic state, but,
          according to some analysts, with the Bosniaks in control.

          Very few refugees and displaced persons have crossed ethnic lines to
          return to their prewar homes, primarily due to resistance from political
          leaders of all three major ethnic groups. Further, according to human
          rights reports, Bosnians of all three ethnic groups could not freely cross
          ethnic lines at will or remain behind to visit, work, or live without facing
          harassment, intimidation, or arrest by police of other ethnic groups.
          Essentially, true freedom of movement across ethnic boundaries does not
          yet exist. Similarly, Bosnia’s political leaders from all sides have often
          blocked efforts to link their ethnic groups politically or economically.
          Virtually all of the limited progress on the civil aspects has resulted from
          strong international pressure on these often resistant political leaders. As

          1
           Bosnia Peace Operation: Progress Toward Achieving the Dayton Agreement’s Goals
          (GAO/NSIAD-97-132, May 5, 1997).



          Page 1                                          GAO/T-NSIAD-97-216 Bosnia Peace Operation
                       one international official noted, the Bosnia peace process remains driven
                       from the outside rather than from within.

                       During our June 1997 visit, nearly every international and U.S. official with
                       whom we spoke, including senior NATO officers, were adamant that
                       Radovan Karadzic, a Bosnian Serb who was indicted by the war crimes
                       tribunal, must be arrested or otherwise removed from Bosnia. Most were
                       unequivocal on this matter, and stated that he retains political power and
                       influence over political figures in Republika Srpska, the Bosnian Serb
                       entity. So far, according to these officials, he has seen fit to block every
                       significant move toward reconciliation.

                       Other key issues identified as being critically important to the Dayton
                       Agreement’s success include the municipal elections scheduled for
                       September 13 and 14, 1997, specifically the potentially contentious
                       installation of some newly elected municipal governments; the outcome of
                       the arbitration decision concerning which ethnic group will control the
                       strategically important city of Brcko in Republika Srpska; and the issue of
                       whether an international military force, including the U.S. military, should
                       remain in Bosnia after the current NATO-led mission ends in June 1998.

                       I should note that our field work in Bosnia was completed before the
                       recent political crisis in Republika Srpska, and my statement does not
                       address this issue. However, even if President Plavsic wins the political
                       struggle with more hardline Bosnian Serb political leaders, we believe that
                       full implementation of the Dayton Agreement—in other words, full
                       political and social reconciliation in Bosnia—will remain a long and
                       difficult process.

                       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 $7.8 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.


                       I will briefly review, and in some cases update, our report’s findings on
Progress Toward        progress made in achieving the Bosnia peace operation’s four key
Achieving the Dayton   objectives. These objectives were to (1) provide a secure environment for
Agreement’s Goals      the people of Bosnia; (2) create a unified, democratic Bosnia that respects
                       the rule of law and internationally recognized human rights, including



                       Page 2                                 GAO/T-NSIAD-97-216 Bosnia Peace Operation
                           cooperating with the war crimes tribunal in arresting and bringing those
                           charged with war crimes to trial; (3) ensure the rights of refugees and
                           displaced persons to return to their prewar homes; and (4) rebuild the
                           economy.


Progress in Providing a    The Bosnian people are more secure today than before the Dayton
Secure Environment         Agreement was signed. Bosnia’s Serb, Croat, and Bosniak armies have
                           observed the cease-fire, allowed NATO’s Implementation Force and later
                           the Stabilization Force, known as SFOR, to monitor their weapons sites and
                           troop movements, and have reduced their force levels by a combined total
                           of 300,000. The U.S.-led “train and equip” program intended to help
                           stabilize the military balance in the region and integrate the Bosniak and
                           Bosnian Croat armies into a unified Federation army is progressing, albeit
                           slower than anticipated.

                           Nonetheless, Bosnian Serb political leaders have not fully lived up to arms
                           reduction agreements. 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. Bosnian Croat and Bosniak
                           political leaders have made some progress in reforming their civilian
                           police so that they provide security for Bosnians of all ethnic groups and
                           do not commit human rights abuses; however, Bosnian Serb political
                           leaders have refused to cooperate with the International Police Task Force
                           (IPTF) in reforming their police force in accordance with democratic
                           policing standards. Moreover, many international observers, including
                           some in the State Department, believe that keeping an international
                           military force in place is still the only deterrent to major hostilities in
                           Bosnia.


Progress in Developing a   A unified, democratic state that respects the rule of law and adheres to
Unified, Democratic        international standards of human rights has yet to be achieved. Elections
Bosnia                     for institutions of Bosnia’s national and two entity governments
                           (Republika Srpska and the Federation) were held in September 1996, and
                           many national joint institutions intended to unify Bosnia’s ethnic groups
                           have met at least once. However, most of these institutions are not yet
                           functioning; Bosnia’s three separate, ethnically-based armies continue to
                           be controlled by their wartime political leaders; and many Bosnian Serbs
                           and Croats and their political leaders retain their wartime goal of
                           establishing ethnically pure states separate from Bosnia. Moreover, the



                           Page 3                               GAO/T-NSIAD-97-216 Bosnia Peace Operation
                         human rights situation worsened in the months after the election,
                         particularly in Bosnian Serb-controlled areas. And ethnic intolerance
                         remains strong throughout Bosnia, in large part because Bosnia’s political
                         leaders control the media and use it to discourage reconciliation among
                         the ethnic groups.

                         Additionally, as of July 10, 1997, 66 of the 74 people2 publicly indicted by
                         the war crimes tribunal remained at large, 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 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.

                         On July 10, 1997, NATO-led troops in Bosnia for the first time attempted to
                         arrest people indicted for war crimes, specifically two Bosnian Serb
                         suspects who had been charged under a sealed indictment for complicity
                         with commitment of genocide. British SFOR soldiers arrested one suspect
                         and, in self-defense, shot and killed the other after he fired at them. U.S.
                         officials have stated that this action does not represent a change in policy
                         regarding SFOR’s mandate to apprehend indicted war criminals. The policy
                         remains that SFOR troops will arrest indicted war criminals when they
                         come upon them in the normal course of their duties if the tactical
                         situation allows.


Progress in Returning    Despite guarantees in the Dayton Agreement and extensive international
Refugees and Displaced   efforts to resolve the issue, the return of refugees and displaced persons to
Persons                  their homes has barely begun in Bosnia. The returns that did take place in
                         1996 and 1997 were mainly people going back to areas controlled by their
                         own ethnic group because returns across ethnic lines proved nearly
                         impossible. Of the estimated 2 million people who were forced or fled
                         from their homes during the war, in 1996 about 252,000 returned home
                         (88,000 refugees and 164,000 displaced persons), while at the same time
                         over 80,000 others fled or were driven from their homes. Almost all of
                         these people returned to areas in which they would be in the majority
                         ethnic group. For 1997, the United Nations High Commissioner for
                         Refugees (UNHCR) decided to give priority to majority returns and

                         2
                          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. Also, other
                         people not included in these figures have been indicted by the war crimes tribunal under sealed
                         indictments.



                         Page 4                                              GAO/T-NSIAD-97-216 Bosnia Peace Operation
projected that 200,000 refugees would return to their homes, all to
majority areas.3 As of March 1997, the pace of refugee returns exceeded
UNHCR’s target as about 17,000 refugees returned to Bosnia. In mid-June
1997, however, UNHCR officials in Bosnia told us that this pace had recently
fallen off,4 and, if the current trend continued, the number of refugee
returns for 1997 would be lower than projected.

A number of factors have combined to hinder returns, such as fear,
stemming from lack of personal security; violence triggered by attempted
cross-ethnic returns; poor economic prospects; and lack of suitable
housing. Further, political leaders of all ethnic groups have used
nonviolent means to resist returns, including the retention of existing,
discriminatory property laws and continuing other policies that place
insurmountable barriers to returns. For example, according to UNHCR
officials, Bosnian Croat political leaders, as directed by Croatia, have
moved 5,000 to 6,000 displaced persons—including Bosnian Croat army
members and their families—into the formerly Serb-populated city of
Drvar, a policy designed to prevent Serbs from returning and to cement
the ethnic separation of Bosnia. This policy has been implemented by all
three ethnic groups during and after the war.

Recent efforts to address the return problem involved many aspects of the
Bosnia peace operation. For example, in spring 1997 UNHCR, with support
from the U.S. government, announced the “Open Cities” project that is
designed to provide economic incentives to those areas that welcome and
actively integrate refugees and displaced persons into local communities.
In April, the Federation refugee minister provided UNHCR with a list of 25
cities and towns for participation in the project. As of mid-June 1997,
UNHCR was evaluating the level of commitment of these and other
communities that had indicated an interest in the project. According to a
U.N. official, in early June the Republika Srpska Minister of Refugees was
going to submit a list of nine cities in Republika Srpska that wanted to
take part in the project. At the last minute, however, the minister was
directed not to participate by Radovan Karadzic, who effectively retains
control of Republika Srpska.

According to a State Department official, the U.S. embassy and UNHCR in
early July 1997 officially recognized the first three communities to receive
assistance under the “Open Cities” project. The U.S. government is also

3
 According to a UNHCR official, UNHCR has no estimates for returns of displaced persons in 1997;
however, it has an informal target of 20,000-30,000 returns of displaced persons for the year.
4
According to a UNHCR official, 23,000 refugees had to returned to Bosnia from January through
May 1997. This is much lower than UNHCR’s target of about 57,000 refugee returns for that period.


Page 5                                             GAO/T-NSIAD-97-216 Bosnia Peace Operation
                             funding minority return programs in two other communities. Of these five
                             communities, three are in Bosniak-controlled areas, one is in a Bosnian
                             Croat-controlled area, and one is in Republika Srpska.


Progress in Rebuilding the   Economic conditions have improved somewhat since the end of the war,
Economy                      particularly in the Federation. 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.5 Most of this money has gone to
                             the Federation. The U.S. government, primarily through the U.S. Agency
                             for International Development (USAID), committed $294.4 million during
                             the program’s first year. This money went to, among other things, repair
                             municipal infrastructure and services, provide small business loans, and
                             give 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.

                             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.

                             The international community has made many attempts to use economic
                             assistance to encourage compliance and discourage noncompliance with
                             the Dayton Agreement.6 For example, during 1996, according to a State
                             Department official, all major bilateral donors had withheld economic
                             assistance from Bosnian Serb-controlled areas because Bosnian Serb
                             political leaders failed to comply with key human rights and other
                             provisions of the Dayton Agreement. Further, on May 30, 1997, the
                             Steering Board of the Peace Implementation Council, the organization that
                             provides political guidance for the civilian aspects of the operation,


                             5
                              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. Fifty-nine donors—48 countries and 11
                             organizations—pledged $1.9 billion for the 1996 economic reconstruction program.
                             6
                              The Congress has placed conditions on some U.S. assistance. See, for example, Public Laws 104-107,
                             section 584; 104-122; and 104-208, section 101(c), Title II.



                             Page 6                                               GAO/T-NSIAD-97-216 Bosnia Peace Operation
                         reiterated previous Council statements on this issue, tied assistance for
                         housing and local infrastructure to acceptance of returns, and gave
                         priority to UNHCR’s “Open Cities” project.

                         Moreover, an international 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. On June 19, 1997, the
                         donors’ conference was again postponed because the government of
                         Bosnia, although it had made progress in passing economic laws, had not
                         made sufficient progress toward developing an economic program with
                         the International Monetary Fund. As of July 15, 1997, the donors’
                         conference had not been rescheduled.7

                         Some international officials 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 these
                         areas have received little international assistance to date.8 According to a
                         State Department official, when the U.S. government decided on its
                         conditionality policy toward Republika Srpska, it knew from analysis that
                         there would be no quick results from the denial of this assistance.

                         State now believes there is increasing evidence that elected officials of
                         Republika Srpska are under mounting political pressure to make the
                         necessary concessions to qualify for reconstruction assistance. In
                         March 1997, State and USAID officials told us that 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. As of
                         July 1997, there were no tangible results in this area, primarily because
                         attempts to work with these leaders were blocked by Radovan Karadzic.


                         During our June 1997 visit to Bosnia, numerous U.S. and international
Issues Emphasized        officials involved in trying to help implement the Dayton Agreement
During June 1997 Visit   emphasized four areas as being critically important to the agreement’s
to Bosnia                success: (1) the urgent need to arrest Radovan Karadzic; (2) the upcoming

                         7
                          According to a State Department official, the International Monetary Fund favors holding the
                         conference the week of July 21, 1997, but the date may slip to July 28 or 29, 1997.
                         8
                          According to State officials, Bosnian Croat-controlled areas received little economic assistance to
                         date because they suffered little war damage.



                         Page 7                                              GAO/T-NSIAD-97-216 Bosnia Peace Operation
                       municipal elections, specifically the potentially contentious installation of
                       municipal governments in areas that had a different ethnic composition
                       before the war; (3) the outcome of the arbitration decision over control of
                       Brcko; and (4) the need for a continued international military force, along
                       with a U.S. component, in Bosnia after SFOR’s mission ends in June 1998.


Urgency of Arresting   As we previously reported, in 1996 and 1997 the international community
Radovan Karadzic       made some attempts to politically isolate Karadzic and remove him from
                       power. For example, under pressure from the Organization for Security
                       and Cooperation in Europe (OSCE) and the international community,
                       Karadzic stepped down as the head of the ruling Bosnian Serb political
                       party on July 18, 1996.

                       According to international observers, however, these efforts to remove
                       Karadzic from power did not work; instead, he has effectively retained his
                       control and grown in popularity among people in Republika Srpska. U.S.
                       Information Agency 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.

                       During our June 1997 fieldwork in Bosnia, many officials with whom we
                       spoke were unequivocal in their opinion that Radovan Karadzic must be
                       arrested or otherwise removed from the scene in Bosnia as soon as
                       possible. They told us that Karadzic, a leader who is not accountable to the
                       electorate, is blocking international efforts to work with the more
                       “moderate” Bosnian Serb political leaders in implementing the Dayton
                       Agreement. For example, he has not allowed other political leaders,
                       including elected ones, to abide by agreements they have made with the
                       international community on small-scale attempts to link the ethnic groups
                       politically or economically. Observers also told us that Karadzic still
                       controls Republika Srpska police and dominates Bosnian Serb political
                       leaders through a “reign of terror.”

                       According to a U.S. embassy official, the arrest of Karadzic is a
                       necessary—but insufficient—step to allow Dayton institutions to function
                       effectively and to encourage more moderate Bosnian Serbs to begin
                       implementing some provisions of the Dayton Agreement. Although the
                       arrest alone would not assure full implementation of Dayton, without the
                       arrest Dayton would have almost no chance to succeed.



                       Page 8                                 GAO/T-NSIAD-97-216 Bosnia Peace Operation
Issues Related to     Bosnia’s municipal elections are scheduled to be held on September 13
Municipal Elections   and 14, 1997. OSCE and other officials with whom we spoke were
                      concerned about the volatile environment that will likely surround the
                      installation of some newly elected municipal governments, specifically
                      those in municipalities that had a different ethnic composition before the
                      war. Because people will be able to vote where they lived in 1991, the
                      election results in such municipalities could be very difficult to implement.
                      For example, it is possible that a predominantly Bosniak council could be
                      elected to Srebrenica, a city that had a prewar Bosniak-majority
                      population but was “ethnically cleansed” by Serbs in 1995; and Bosnian
                      Serbs could win the majority on the municipal council of Drvar, a town
                      with a predominantly Serb majority before and during much of the war but
                      now populated in large part by Bosnian Croats.

                      To address these potential “hotspots,” an interagency working group led
                      by OSCE is developing an election implementation plan for the municipal
                      elections. An early version of this plan calls for a final certification that
                      confirms which municipal councils have been duly installed by the end of
                      1997.9 This plan recognizes that candidates who win office must be able to
                      travel to municipal council meetings and to move about their municipality
                      without fear of physical attack or intimidation. It calls for local police to
                      provide security for council members and for IPTF and SFOR to supervise
                      the development of the security plan and, together with OSCE and other
                      organizations, monitor its implementation.

                      According to OSCE and SFOR officials, SFOR’s current force level of 33,000
                      will be augmented by 4,000-5,000 troops in Bosnia around the time of the
                      municipal elections; it is unclear, however, what SFOR’s force levels will be
                      during the potentially contentious installation period. To support the
                      augmentation, as of July 10, 1997, the Department of Defense (DOD)
                      planned to increase the number of U.S. troops in Bosnia from about 8,00010
                      to about 10,250 during August and September 1997. According to a DOD
                      official, on October 1, 1997, SFOR troop levels would be drawn down to
                      either the current force level or a lower number, depending on decisions
                      that may be reached before that date. OSCE and other officials in Bosnia


                      9
                       This plan calls for a two-step certification process for the election: a technical certification of the final
                      election numbers and the final certification, on a municipality-by-municipality basis, confirming which
                      municipal councils have been duly installed. The election process will close by the end of 1997. It will
                      be followed by a post-election period during which an interagency monitoring and reporting structure
                      would continue to monitor the proper functioning of municipal assemblies to ensure that elected
                      candidates are able to carry out their duties as envisioned by the Dayton Agreement.
                      10
                       As of July 6, 1997, an additional 2,600 U.S. military personnel were also deployed to Croatia, Italy, and
                      Hungary, in support of SFOR.



                      Page 9                                                 GAO/T-NSIAD-97-216 Bosnia Peace Operation
                   told us that a further drawdown of SFOR below its current force level
                   should not occur until the end of the installation process.


Outcome of Brcko   Many international observers in Bosnia told us that the final arbitration
Arbitration        decision on which ethnic group will control Brcko will likely be a major
                   determinant of the ultimate success or failure of the Dayton Agreement.
                   This decision will not be made until March 1998 at the earliest. Without a
                   final decision, an interim supervisory administration will remain in Brcko.
                   In June 1997, the High Representative, the coordinator of the civilian
                   aspects of the peace operation, stated that Brcko will signal to the rest of
                   the world the extent to which progress is being made in the
                   implementation of the Dayton Agreement.

                   First, some background on the Brcko arbitration process. At Dayton,
                   Bosnia’s political leaders were unable to agree on which ethnic group
                   would control the strategically important area in and around the city of
                   Brcko. The Dayton Agreement instead called for an arbitration tribunal to
                   decide this issue. At the end of the war, Brcko city was controlled by
                   Bosnian Serb political leaders and populated predominately by Serbs due
                   to “ethnic cleansing” of prewar Muslims and Croats, who had then
                   accounted for about 63 percent of the city’s population, and settlement of
                   Serb refugees there. We were told that an arbitration decision that
                   awarded control of the area to either the Bosniaks or Bosnian Serbs11
                   would lead to civil unrest and possibly restart the conflict because the
                   location of Brcko makes it vitally important to both parties’ respective
                   interests.

                   In February 1997, the arbitration tribunal12 decided to postpone a final
                   decision as to which of the parties would control Brcko. Instead, the
                   tribunal called for the designation of a supervisor under the auspices of
                   the Office of the High Representative, who would establish an interim
                   supervisory administration for the Brcko area. 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 tensions and instability at much higher levels than expected.


                   11
                     The parties to the arbitration are Bosnia’s two entities, the Federation and Republika Srpska.
                   12
                    The tribunal consisted of three members—an American, a Bosnian Serb, and a Bosniak. 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 tribunal could not reach
                   consensus. Only the American member of the tribunal signed the decision.



                   Page 10                                              GAO/T-NSIAD-97-216 Bosnia Peace Operation
On March 7, 1997, the Peace Implementation Council Steering Board
announced that the High Representative had appointed a U.S. official as
Brcko supervisor, and the interim supervisory administration began
operating on April 11, 1997.13

The interim administration was designed to supervise the implementation
of the civil provisions of the Dayton Agreement in coordination with SFOR,
OSCE, IPTF, and other organizations in the Brcko area: specifically, it was 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.

According to the Brcko supervisor, known as the Deputy High
Representative for Brcko, the implementation process has just begun. The
Deputy High Representative and his staff have been working hard and are
developing a plan to return refugees and displaced persons in a phased
and orderly manner, but progress will take a long time and be difficult.
From January 1, 1997, through June 17, 1997, only 159 displaced families
from the Bosnian Serb-controlled area of Brcko had returned to their
prewar homes; all of these homes are located in the zone of separation. We
were told that as many as 30,000 Bosniaks and Bosnian Croats were driven
from their homes in what is now Serb-controlled Brcko. Further, freedom
of movement does not yet exist in the area, primarily due to the fear that
Bosniak and Bosnian Serb police have instilled in people from other ethnic
groups. As in other parts of Republika Srpska, Bosnian Serb political
leaders refuse to cooperate with IPTF in restructuring their police in
accordance with democratic policing standards. And the Deputy High
Representative told us that he has no “carrots or sticks” either to reward
compliance or punish non-compliance of the parties, particularly the
Bosnian Serbs.

Brcko has also experienced implementation problems related to the
upcoming municipal elections that go beyond those of other areas of
Bosnia. For example, in June 1997 OSCE took action after it investigated
cases of alleged voter registration fraud by Bosnian Serbs in Brcko. After
finding that Bosnian Serbs were engaging in wholesale fraud, OSCE
attempted to correct the situation by (1) firing the chairmen of the local
election commission and voter registration center, (2) reregistering the
entire Brcko population and political candidates, and (3) suspending and

13
 While the city of Brcko, the subject of the arbitration dispute, is located in Republika Srpska, the
Brcko Supervisor’s area of responsibility covers almost all of Brcko municipality, which extends
across the interentity boundary line into the Federation.



Page 11                                              GAO/T-NSIAD-97-216 Bosnia Peace Operation
                                  later reopening and extending voter registration there, which ultimately
                                  ran from June 18 to July 12, 1997.

                                  The interim supervisory administration is scheduled to operate for at least
                                  1 year. 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.


Need for a Continued              In December 1996, the North Atlantic Council, the body that provides
Military Presence in Bosnia       political guidance to NATO, concluded that without a continuation of a
                                  NATO-led force in Bosnia, fighting would likely resume. Thus, NATO that
                                  month authorized a new 18-month mission, SFOR, which is about half the
                                  size of the previous Implementation Force. SFOR’s mission is scheduled to
                                  end in June 1998. According to the SFOR operation plan, 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.
                              •   Conditions must be established for the safe continuation of ongoing,
                                  nation-building activities.

                                  The SFOR operation plan asserts that these objectives will be achieved by
                                  June 1998. However, international officials in Bosnia recently told us that
                                  the likelihood of these end-state objectives being met by June 1998 is
                                  exceedingly small. They based this projection on their assessments of the
                                  current pace of political and social change in Bosnia.

                                  In their view, an international military force would be required after
                                  June 1998 to deter renewed hostilities after SFOR’s mission ends. They said
                                  that to be credible and maintain international support, the force must be




                                  Page 12                               GAO/T-NSIAD-97-216 Bosnia Peace Operation
                     NATO led and include a U.S. military component, and it must be based in
                     Bosnia rather than “over the horizon” in another country.

                     Many participants of the operation told us that without the security
                     presence provided by such a follow-on force to SFOR, their organizations
                     would be unable to operate in Bosnia; a U.N. official said that IPTF—which
                     consists of unarmed, civilian police monitors—could not function and
                     would leave Bosnia under those conditions. As one international official
                     put it, the follow-on force—including a U.S. military presence—needs to
                     be “around the corner” rather “over the horizon” to provide the general
                     security environment in which the rest of the peace process could move
                     forward.


                     The executive branch initially estimated that U.S. military and civilian
U.S. Costs and       participation in Bosnia would cost about $3.2 billion through fiscal
Commitments Exceed   year 1997: $2.5 billion in incremental costs for military-related operations
Initial Estimates    and $670 million for the civilian sector.14 These estimates assumed that
                     U.S. military forces would be withdrawn from Bosnia when the mission of
                     NATO’s Implementation Force ended in December 1996.


                     The executive branch’s current cost estimate for fiscal years 1996 and 1997
                     is about $5.9 billion: about $5 billion in incremental costs for
                     military-related operations and about $950 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 $1.9 billion for the
                     Bosnia peace operation: about $1.5 billion for military operations15 and
                     $371 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 $7.8 billion for military and civilian support to the operation from
                     fiscal year 1996 to 1998. Some State and Defense Department officials
                     agreed that an international military force will likely be required in Bosnia


                     14
                      DOD costs are incremental costs; that is, they are costs that would not have been incurred if it were
                     not for the Bosnia operation. 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).
                     15
                       DOD estimated its costs could increase by about $160 million if the United States maintained an 8,500
                     force level through June 1998, rather than being drawn down to 5,000 on October 1, 1997, as assumed
                     in current cost estimates.



                     Page 13                                             GAO/T-NSIAD-97-216 Bosnia Peace Operation
           after June 1998. U.S. participation in such an effort could push the final
           cost significantly higher than the current $7.8 billion estimate.


           Mr. Chairman and Members of the Subcommittee this concludes my
           prepared remarks. I would be pleased to respond to any questions you
           may have.




(711278)   Page 14                                GAO/T-NSIAD-97-216 Bosnia Peace Operation
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