LOCAL PRESS

 

Dacic announces meetings and diplomatic activities of Serbian delegation to UN (Tanjug)

Serbian Foreign Minister Ivica Dacic is scheduled to participate in a special conference that will bring together foreign affairs ministers of the Western Balkan countries and the EU enlargement commissioner in New York this week. Announcing the activities of the Serbian delegation at the 69^th session of the UN General Assembly, Dacic said that he will take part in the meeting of the OSCE three consecutive chairmanships including officials from Serbia (2015), Ukraine (2013) and Switzerland (2014). The Serbian Minister and his Western Balkan colleagues will attend the meeting on peacekeeping operations, which will be chaired by U.S. Deputy President Joe Biden, tabling the fight against Islamic terrorism and terror group Islamic State as the key topic. This issue will be discussed at a special session of the UN Security Council, which will be attended by U.S. President Barack Obama, and Dacic underlined at a press conference that Serbia will offer strong support to the war on terror. The session of the UN General Assembly, in which our country will be represented by President Tomislav Nikolic, as well as the accompanying diplomatic activities, will be very important for the strengthening of Serbia’s international position, which is currently better than a few years ago, Dacic assessed.

 

Dacic: Serbia expects opening of some chapters by end of year (Beta)

Serbian Foreign Minister Ivica Dacic has stated at a press conference devoted to the UN General Assembly session that Serbia expects to open some chapters with the EU by the end of the year. He said this could be Chapter 32 on financial control and Chapter 35 on other issues that also include the Kosovo issue in Serbia’s case. Dacic said that Germany considers that the first chapters that need to be opened are Chapters 23 and 24 on the rule of law that will be ready for opening in the first half of next year. “We point to this in all talks with the EU, with the EU Presiding country Italy, in all talks with Germany, and the Prime Minister also stressed this in talks with Angela Merkel, because we think that it would be good to open some chapters before that and we expect a positive stand if possible,” said Dacic. He said that Chapter 32 is ready for opening, while Chapter 35 is stalled since it concerns the implementation of the Brussels agreement, but due to the political crisis in Kosovo, as he said, “there is no other side to implement this agreement”.
Results of joint session of two governments (Politika/FoNet/Tanjug)

At the joint session of the governments of Republic of Serbia and the Republika Srpska (RS) it has been agreed to form a Coordinating body for the joint development for production and processing of agricultural and other kinds of products and the possibility of their joint export on the foreign markets. Serbian Prime Minister Aleksandar Vucic said that he and the RS Prime Minister Zeljka Cvijanovic are satisfied with the development of the infrastructural projects like the bridge Bratunac – Ljubovija and critical of the progress on construction of the railways at Priboj – Rudo. According to FoNet, Vucic said that there were talks about the cooperation in the segment of telecommunications, and that in a few months we can expect the agreement about no roaming for citizens of the five countries: Serbia, B&H, Montenegro, FYR of Macedonia and Albania, to be operational. Cvijanovic is satisfied with the results of the joint session with the Government of Serbia, Tanjug reports. She also said that RS has expressed the preference of joining the “Podrinje” project with all its projects like construction of the Bratunac-Ljubovija Bridge, project “Srednja Drina” and the construction of “Andricgrad”.

Djuric: Return of displaced unsatisfactory (RTS/Tanjug)

“The overall results of the return of displaced persons to Kosovo and Metohija over the past decade and a half are unsatisfactory,” the Head of the Serbian government Office for Kosovo and Metohija Marko Djuric told a press conference in Kosovska Mitrovica. “The efforts related to the return of displaced persons to Kosovo and Metohija must be doubled, and ensuring the return of at least some of the more than 247,000 persons to the province is a great responsibility. For that to happen, it is not enough just to appear at a press conference and urge them to return to Kosovo and Metohija - we must also ensure the basic conditions for the returnees, such as security, jobs, education, access to infrastructure and health care, as well as a normal life environment. Seventy percent of those who have been expelled from Kosovo and Metohija still have no housing, 60 percent are unemployed, while 70 percent of them live in poor conditions on the verge of poverty or below the poverty level. That is something we must deal with if we want to ensure a strategic survival and a return to Kosovo and Metohija,” said Djuric.

 

Kurz: Important role of Austria in B&H (Danas)

Minister of Foreign Affairs of Austria Sebastian Kurz said that his country will be playing an even more important role in B&H and reminded that in 2015 it will be a host for the new meeting of the Western Balkan leaders. The Austrian Minister said that B&H is dangerously falling behind other countries in the region, especially in the process of joining the EU. “We are strongly encouraging the B&H politicians to rapidly implement socio-economic reforms. The international community is ready to assist but the biggest amount of work has to be done by B&H,” said Kurz. He also invited B&H citizens to vote in October elections and to hold politicians responsible for what has been done after the elections. He pointed out that the elections will be observed by local and international observers and that he is convinced that the elections will be democratic, free and regular. When asked about the possibility of separation of the Republika Srpska (RS) from B&H, Kurz said that B&H has a lot of problems that have to be solved, that’s why we must step away from the politics that are based on nation, party membership or personal agendas.  “B&H is one and united and in Brussels there is a seat for it”, he also pointed out that in the next five years the EU will be ready for the integration process of all Western Balkan countries.

 

Talks with EU according to plan, EU supports saving measures (Novosti)

Serbia’s accession talks with the EU are going on in line with the plan, and the EU supports the saving measures and economic reforms implemented by the Serbian government, it has been assessed at the government session, attended by Head of the EU delegation to Serbia Michael Davenport. It has been stated in the press release from the government that the report on the hitherto accession talks was discussed and it was noted that the explanatory and bilateral screenings on 15 chapters had been completed. During the session it was assessed that the EU supported the actions of the Serbian government and was ready to help Serbian efforts to enable the economic growth, efficiency, competitiveness and economic consolidation, stated the Government Office of Media Relations.

 

REGIONAL PRESS

 

B&H Elections: High numbers of candidates for the Assemblies (Oslobodjenje)

Lists for the Tuzla Canton Assembly

For the upcoming October elections, for the Tuzla Canton Assembly, in total 23 political parties and coalitions and one independent candidate have reported their participation. (The) most candidates, 38 of them are on the list of the Union of Social Democrats – Union for all of us, SBB, SDP B&H, BOSS, SDA, the Democratic Front – Zeljko Komsic, Party for B&H, Regional Democratic Alliance Tuzla, NSRB, coalition Together for Change (SPP, SP/U, SDU, DNZ, SUND, LDS) while one less candidate is offered by BPS. Number of 35 candidates per list is on the lists of Our Party and the coalition of HDZB&H, HSS, HKDUB&H, and HSP Herceg-Bosna. Other parties have less candidates on their lists.

List for the Assembly of Canton N. 10

In the Canton 10 there are in average 13 candidates in the race for a parliamentary seat. The total number of registered candidates is 337 from 20 political parties and coalitions. There is (a) space for 25 parliamentarians. The highest number, 27 of them is on the lists of SNSD, SDP, Democratic Front – Zeljko Komsic, HDZ 1990, NSRB, coalition HDZB&H, HSS, HKDUB&H, HSP Herceg-Bosna, Farmers Association of Rights (HSP B&H – Stjepan Radic HSS) and the Croatian independent list. The expectations for the majority of the parties are the same or better results than four years ago.

 

EU welcomes normalisation of energy ties between Kosovo, Serbia (Kuna)
BRUSSELS, Belgium  -- EU High Representative Catherine Ashton Saturday welcomed this week's signing of an agreement by the Power Transmission Companies KOSTT of Kosovo and EMS of Serbia. "Through this agreement between the Transmission System Operators energy relations between Pristina and Belgrade will be normalised, and KOSTT can play its role of managing the high-voltage networks in Kosovo," Ashton’s spokesman Michel Mann said in a statement. It noted that the two sides also approved the Action Plan to implement Arrangements on Energy, reached by the Prime Ministers of Kosovo and Serbia last year in the EU-mediate dialogue for normalisation of relations between Belgrade and Pristina. "These steps are crucial for the implementation of Energy Arrangements; we expect they will promote a stable and secure power supply that all citizens deserve," added the statement.

 

INTERNATIONAL PRESS

 

Serbia on the Forefront for South Stream (Natural Gas, 22 September 2014)

While Serbia appears one hundred percent committed to pursuing the South Stream project, the EU continues to produce new ideas on how to block the proposed gas route. This is in the midst of a confused political situation regarding the pipeline's entry point in Bulgaria, a country about to enter a polarized early general election.

To begin, the EU's Directorate-General (DG) for Energy, through its spokesperson, recently stated that the Commission cannot legally enforce its provisions against South Stream, regarding the portion that will pass through Serbia, due to its non-EU member state status as it is not bound by the same rules.

According to news streams out of Belgrade and Moscow, the Serbian route should start its construction process by mid-October 2014. Nevertheless, it should be noted that without Bulgaria's part of the pipeline, it is not feasible to assume construction will commence before the new Bulgarian government is elected after the 5th of October and is ready to announce a re-commencement of work on the section going from the Black Sea up to the borders with Serbia. As such, it can be assumed that the infrastructure process in Serbia itself will be delayed by a few weeks (and possibly a few months). It is highly unlikely that a single party will win the elections in Bulgaria so as to have an autonomous government without having to rely on minority legislative votes. In short, what happens in Sofia could eventually derail the schedule of South Stream.

Bearing in mind Bulgaria’s crucial role, the EU Commission through its DG Energy spokesperson Marlene Holzner, relayed that the country is an EU member and therefore it should abide by common rules otherwise punitive measures could be taken against it. It is of interest to note that the EU assured it is monitoring Bulgaria's stance and asks for re-confirmation of its posture vis-a-vis South Stream, effectively putting the country in 'quarantine' until further notice. This has already caused a reflex of nationalism across a wide spectrum of the Bulgarian media and political circles and may actually pave the way for the supporters of the gas pipeline to rise in the upcoming elections.

Moreover, the European Parliament (EP) voted in favor to scrap all agreements made by member states regarding South Stream, including Bulgaria, Greece, Italy, Austria, Croatia, Slovenia, and Hungary. Taking things a step further, the voting of the EP requests all 28 member states to cancel all previous energy agreements in both oil & gas and nuclear towards Russia, despite the fact that should such a move take place, European industry and consumers will be dealt with a heavy blow of epic financial proportions and cause volatility on the global energy market.

The voting in effect does not have a legal binding power, but it carries a political message and further complicates a project like South Stream - a project at the epicenter of a battle between Brussels and Moscow, and brought further into the limelight due to the Ukraine crisis. It can be safely assumed that the 'Babylonian' structure of the EU's institutions coupled with the conflicting interests between member states and corporations regarding a joint stance against Russia, will inevitably delay South Stream, not so much as a united front opposition but exactly because of the conflicting nature of all powers involved.

Bearing that in mind, Serbia in particular is bracing itself for a the worst case scenario, that of a natural gas disruption of the flow from Gazprom to Europe this winter, thus it has requested from the neighboring Hungary to make use of its well-developed gas storage facility system, while it gradually fills up its own units. Another option is to make use of Gazprom's ability to store gas in Hungary in order to cover the needs of the whole region, which also illustrates the role of Budapest as a major energy security hub for the whole of Southeastern Europe.

According to a report from LSE's European Politics & Policy Academic Forum, Serbia "would be hardest hit by a suspension of Russian gas exports through Ukraine." Serbia gets 100% of its gas needs via Ukraine, while in the previous 2009 crisis which lasted briefly it made use of Hungarian storage facilities to avoid a crash in the local heating and electricity system. According to Eurogas figures for 2012, Bulgaria has an almost 85% dependency on Russia for local consumption, while for the whole of 2013 its reliance on the gas transiting Ukraine stands at 100%, with almost identical figures expected to date.

 

Serbia Says Bets Off For South Stream (New Europe, 22 September 2014)

ATHENS - Serbia is concerned with the future of the Gazprom-driven South Stream gas pipeline following the deterioration of relations between Russia and the European Union with the latter warning it will block the project unless it complies with EU regulations.

“For Serbia it [South Stream] has been the cornerstone of our industrial strategy for the next 10 years so the situation is worrying us,” Vuk Jeremic, former foreign minister of Serbia, told New Europe on the sidelines of the Athens Forum 2014 on September 15.

“Right now the bets are off. But I’m hopeful that there will be progress in the future. But it would have to be part of a wider development of normalisation of relations between Russia and the West which currently does not seem to be in the making,” he said.

Reminding that Gazprom is one of the biggest foreign investors in Serbia, Jeremic stressed that such a project would be of immense importance for his country’s economy so there are reasons for Belgrade to be worried.”

On September 16, Serbian media quoted Gazprom official Aleksandr Siromyatin as saying works to build the Serbian stretch of South Stream will start in October. He noted that construction work in Serbia will be carried out regardless of the situation in Bulgaria, where the work on South Stream pipeline has been suspended until the project is fully harmonised with the EU regulations.

But the European Commission warned Serbia on September 17 that it must respect EU law. Marlene Holzner, the spokeswoman for EU Energy Commissioner Günther Oettinger, noted that since Serbia is not part of the EU, it’s not the bloc’s internal market rules that will apply to them. “In terms of energy rules that might be broken that will become also at a later stage and that will be the case when the pipeline is operating,” she said.

“However, whether it is Serbia or whether it is Bulgaria, if the idea is to bring gas from Russia to Europe you have to go through European territory and that means, even if there is a small stretch, you want to build until the very end and ... if you do business on European territory, you do have to respect European legislation,” Holzner said.

The tension between Brussels and Moscow and the Ukraine-Russia gas dispute have also raised concerns of another gas crisis.

Danilo Türk, former president of Slovenia, told New Europe at the Athens Forum that his country is able to handle potential gas disruptions. “But the problem is wider, it has to do with Europe, its own energy security, its own energy future and I think this is a very real question that would have to be addressed very soon,” Türk said.

The former Slovenian president suggested that the whole energy situation in the EU should be one of the first tasks of the new Junker Commission, adding that “there has to be some serious talk with Russia”.

Both Türk and Jeremic told New Europe that they cannot exclude the possibility of another gas crisis with the latter reminding that “we’ve seen such situations in the recent past when the overall situation was a lot easier than it is today”.

 

Gazprom, Bosnia agree gas supplies terms (New Europe, 22 September 2014)

Russian gas monopoly Gazprom said on September 16 it has agreed terms for gas supplies to Bosnia’s Serb Republic.

The agreement was signed with Bosnian company Gas Res during a visit to Moscow by the president of Bosnia’s Serb-run entity Republika Srpska (RS), Milorad Dodik, and the entity’s Prime Minister Zeljka Cvijanovic.

Gazprom said in a statement gas will be delivered to the Serb Republic from mid-2015 via existing pipelines until the launch of the South Stream pipeline branch on Bosnian territory.

The drafting of an intergovernmental agreement related to the construction of the South Stream pipeline is in its final stages, the statement said, adding that the pact would also cover expanding the use of gas in the energy sector.

On September 15, the government of the Serb Republic said Gas Res will buy gas directly from Gazprom - without any go-betweens - and will distribute it to customers on the entity’s territory, making cheaper supplies possible, SeeNews reported.

Cvijanovic said in the government statement that a memorandum for cooperation was also signed in Moscow with Russian state-controlled oil company Zarubezhneft. The company plans to convert its majority-owned oil refinery Rafinerija Nafte Brod in Bosnia to run on natural gas instead of fuel oil, Cvijanovic added.

Dodik said the intergovernmental agreement on South Stream should be signed in the coming 30 to 60 days.

The South Stream branch towards Bosnia is planned to split off from the section of the pipeline that will cross neighboring Serbia.

South Stream is Gazprom’s project aimed at constructing a gas pipeline with a capacity of 63 billion cubic metres to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. The first gas will be supplied via South Stream in late 2015. The gas pipeline will reach its full capacity in 2018.

In 2012 Gazprom and Republika Srpska signed the Memorandum of Understanding, envisaging the possible construction of a gas branch from South Stream to Republika Srpska and gasification of the population centers along its route. The document also expresses the parties’ interest in the development of power generation projects, including the conversion of existing power plants in Republika Srpska to natural gas.

GAS RES is a gas company of Republika Srpska. It is focused on gas distribution and sale across the country.

 

IMF to halt aid to Bosnia until agreed policies implemented (Reuters, by Daria Sito-Sucic, 19 September 2014)

SARAJEVO, Bosnia - The International Monetary Fund will hold off on disbursing the next tranche of Bosnia's aid programme until the Balkan country implements agreed economic policies, most likely after the October election, a senior IMF official said on Friday.

An IMF mission visiting Bosnia could not conclude the eighth review of its 380 million euro ($487.92 million) standby arrangement for Bosnia, in place since September 2012, said Ron van Rooden, who headed a 10-day mission.

"We have a number of outstanding issues, commitments on the standby agreement, where things still need to be done," Van Rooden told Reuters in an interview.

"We see a hole emerging in the budgets so we would like to see still an effort from the governments to compress non-priority spending, not related to addressing the impact of the floods," he added.

Van Rooden said the IMF would revise its target ceiling for Bosnia's budget deficit this year to 2.5-3 percent of GDP, from 2 percent previously.

The IMF doubled its typical aid tranche in June to about 191 million euros to help Bosnia cope with damage from devastating floods in May, estimated at about 2 billion euros.

Bosnia's two autonomous regions also needed to improve cooperation in identifying tax evasion and improving tax compliance, and strengthen banking supervision, Van Rooden said.

If Bosnia passes the review, the IMF's executive board would distribute around 67 million euros at the end of October to help the two regions plug their budget deficits.

"There is still time ... We recognise there are elections now but we want to see the measures (in place) that governments themselves can do," Van Rooden said.

On a positive note, he said Bosnia's economy seemed to be more resilient to the impact of the flooding, with industrial production, exports and tax revenues picking up.

"As a result, we still project a modest but positive growth rate of GDP (for 2014) of close to 1 percent," Van Rooden said, revising up the IMF's previous forecast, made in May, of around 0.5 percent. But he warned that a delay in large projects due to the flooding would have a negative impact on the economy.

"Emergency assistance has been coming in but bigger amounts, bigger projects for real reconstruction is clearly taking more time and we don't see any of this money coming in this year," he said. "That will slow the recovery of the economy."

 

Bosnian Serb leader says Russia will loan region 500-700 mln euros (Reuters, 19 September 2014)

BANJA LUKA, Bosnia - The leader of Bosnia's autonomous Serb Republic said on Friday Russia would loan the region 500 million to 700 million euros ($643 million to 900 million) to help steady its finances after devastating flooding in May.

There was no immediate confirmation from Russia.

Bosnian Serb President Milorad Dodik, who faces a general election on Oct. 12, met Russian President Vladimir Putin on Thursday in Moscow during a five-day visit that his opponents criticised as electioneering with government money.

"I have received confirmation that the Russian government, after passing a revised budget, agreed to approve a loan of between 500 and 700 million euros to Republika Srpska (the Serb Republic)," Dodik told a news conference on his return to the regional capital, Banja Luka.

He said his government had asked for a grace period of two to three years, an interest rate of 2 to 3 percent and a 10-year maturity.

"These are our terms, which the Russian side has neither rejected nor accepted," he said. The loan would require parliamentary approval in Russia, he said, since the Serb Republic is not a state.

The election is complicating efforts to meet terms set by the International Monetary Fund for disbursement of new funds under its loan agreement with Bosnia. The IMF sent a mission last week, but Bosnian Prime Minister Vjekoslav Bevanda said on Wednesday the governments in Bosnia were unlikely to meet reform deadlines.

Dodik said the Serb Republic needed a reserve plan - the Russian loan - in case the IMF on Friday freezes disbursement.

"We do not want to break the agreement with the IMF, but we cannot accept blackmail," he said.

Dodik has long tried to nurture ties with Russia, seen by some nationalist Serbs as their big-power protector. The Bosnian Serb leader advocates secession from Bosnia, something the West opposes.

Bosnia, split between two autonomous regions at the end of the 1992-95 war, suffered damage estimated at around 2 billion euros during the worst rainfall to hit the Balkans since records began more than a century ago.

Bosnian Serb Prime Minister Zeljka Cvijanovic said that Russia's VTB bank had approved a credit of 65 million euros to help the region plug a budget deficit that has widened since the flooding.

 

Analysis: Bosnian Election Campaign Sparks Outrage and Despair (BIRN, by Srecko Latal, 22 September 2014)

The pretentious slogans of the parties competing in the October elections contrast sharply with the wretched mood of a country in crisis

Billboards and posters showing parties’ names, politicians’ faces and election slogans mushroomed across Bosnia and Herzegovina over the weekend, marking the start of the month-long campaign ahead of elections on October 12.

Many citizens reacted to the political marketing with a mixture of ignorance, irritation and outright anger.

“Over the past four years, all political options have shown that they only care for themselves. It is very difficult for people to decide who to vote for in these elections, or why,” Tanja Topic, a political analyst in the northwestern town of Banja Luka, said.

In stark contrast to the politicians’ self-confident faces and the promising slogans displayed on billboards, the overwhelming mood of much of the population is one of despair.

“Everything is falling apart. People are losing jobs, and pensions and social benefits are getting more and more delayed,” Esad Pozder, an elderly vendor at the Sarajevo Markale marketplace, lamented. “There is less and less food and it is getting more and more expensive,” he added.

With both his children and grandchildren out of work, Esad is sustaining his family on his meager takings earned from selling fruits and vegetables from his stall.

With its complicated and ineffective administration, poor public services, feeble economy, dysfunctional social services, high public spending and rampant corruption, Bosnia has been in the dire need of reform for years.

The country witnessed fresh political chaos after the last general elections in 2010, as parties established temporary alliances with other parties on different administrative levels over particular issues of joint interest - only to abandon those coalitions after few months, weeks or days to establish different alliances with other parties on different sets of issues.

Complex political arrangements stalled and reversed the reform process, crippled the economic and social basis of the country and impaired the ability of institutions, laws and mechanisms to function.

Budget payments and overall financial stability became mostly dependent on support from the International Monetary Fund and on short-term borrowing. Experts agree that fresh loans have only delayed inevitable economic and social reforms, while at the same time making them more difficult.

Growing public dissatisfaction exploded in a series of protests at the beginning of February 2014. The social uprising was briefly hijacked by hooligans, who caused violence on a scale unseen since the end of the 1992-5 war.

Local politicians and international diplomats were initially shocked by the violence, but then forgot about it as the protests subsided and became overshadowed by other local and global developments.

Political infighting has also blocked Bosnia’s path to the eventual EU membership, which Brussels unwisely conditioned on hard-to-achieve constitutional reform.

After a year of negotiations failed to produce a breakthrough, the EU Enlargement Commissioner, Stefan Fule, early in 2014 announced the end of Brussels-facilitated negotiations and pledged a new approach, focused more on economic and social issues.

Following this idea, during spring and summer, the EU organized conferences and workshops with government officials, non-governmental organizations and local and international experts, and in July presented the “Compact for Growth” – an agenda for reform in six key economic and social areas.

The EU hoped that local leaders would include this reform agenda in their election campaigns, but it has proved too complicated, difficult and unpopular for most parties even to consider it.

“The cost of not reforming is that young people will have no future in their own country," the Special EU Representative for Bosnia and Herzegovina, Peter Sorensen, warned in a press release on Monday.

The EU-prepared programme has also been sidelined by the biggest natural disaster in recent history – a series of floods and landslides that have struck since May, destroying houses, businesses and infrastructure. Repeated floods and landslides have temporarily displaced about 90,000 people and caused damage estimated at 2 billion euros.

According to the assessment compiled by international and local experts, presented at the international flood-relief donor conference in Brussels on July 16, the natural disaster has caused losses equivalent to nearly 15 per cent of Bosnia’s GDP.

As a result of the damage, the economy is expected to contract by 0.7 per cent in 2014, and the fiscal deficit is expected to rise from a baseline of 2 per cent of GDP to 4.5 per cent, opening up a significant public sector financing gap of 1.7 per cent of GDP.

The trade deficit is likely to come under further pressure, widening to 34 per cent of GDP, while the current account deficit is projected to increase from a baseline 7.8 to 9.7 per cent of GDP by the end of 2014.

Behind these raw figures, thousands of families have lost homes, farms, jobs or all of the above. The disaster has further worsened an already difficult economic and social situation.

“Bosnia and Herzegovina is facing a collapse – the number of pensioners is about to reach the number of workers,” the Croatian daily newspaper Vecernji List reported on September 7.

Yet, the reaction from Bosnia’s governments has been slothful, before, during and since the floods. Some local leaders used the opportunity, and the media organizations they control, to tour flooded areas in helicopters, boats and rubber boots. Many others, from state, entity, cantonal and municipal administrations, just left the country for their scheduled summer holidays.

“Politicians have robbed this country dry, but when the floods came, they simply left for holidays,” one senior international official engaged in flood-relief activities said.

“Eventually they came back – but only to start their election campaigns. I do not know what they have to sell to their people anymore,” the same official added.

At the Brussels donor conference in July, Bosnia received pledges for 809 million euro for flood-relief activities. Much of this money was offered in the form of loans, but the local community in flood-stricken areas hoped that this money would at least help them restore their homes and basic services before winter set in.

Yet, even the use of these funds has been delayed because Bosnia’s divided and uncoordinated local authorities have been slow to prepare the necessary documentation for reconstruction projects.

In an unusually candid open letter, published on July 22, the Japanese ambassador to Bosnia, Hideo Yamazaki, said Japan would not be able to disperse the 5 million euro that Japan had pledged because the local authorities had failed to prepare the necessary paperwork.

“Japanese assistance to BiH is on a project basis, and, in the absence of a concrete plan and programme, we will not be in a position to finance rehabilitation and reconstruction,” the ambassador wrote. “Japan cannot just transfer easy money to the BiH authorities for their disposal,” the letter continued.

According to the senior international aid official, by mid-September – almost two months after the donor conference – the situation remained the same and international donors still awaited actions plans and documents.

Foreigners’ growing frustration was reflected in yet another unusually candid public statement, this time in a blog co-signed by David Barth, director of the United States Agency for International Development, USAID, in Bosnia and Herzegovina and by Col. Scott Miller, the US Defense Attaché.

“Four months after the initial floods, politicians throughout BiH have no real plans, or even serious ideas, to offer for recovery. Flood victims have seen little to nothing except for empty promises and excuses from their leaders,” the two diplomats wrote in the text, titled “Outrage,” published last Thursday on the US embassy blog.

Bosnia’s Foreign Minister, Zlatko Lagumdzija, responded with his own blog on Friday, blaming the delays in flood-relief activities on Bosnia’s complicated administrative system and criticizing foreign agencies for not cooperating with local institutions and withholding information about available funds and ongoing flood-related activities.

“Better coordination would be desirable among all of us, as we can only succeed in the reconstruction of the country if we are united,” Lagumdzija said, not missing this opportunity to repeat one of the election slogans of his Social Democratic Party, SDP, – “United.”

While local and international officials trade accusations, the situation remains critical in many flood-hit areas. According to a field survey conducted by local anti-corruption NGO network “Account”, in most areas hardest hit by floods and landslides, people said they had only received a little humanitarian assistance, while they were still awaiting funds and construction material to start repairing their homes.

What is especially troubling is that among 876 people interviewed in seven towns across the country, 35 per cent reported witnessing irregularities in the distribution of flood assistance.

Local and international experts express concern that many politicians will use the floods and non-transparent distribution of flood assistance either for their election campaigns, or to siphon off the money into their own pockets.

Meanwhile, the IMF and the World Bank have provided Bosnia with budget support and emergency recovery funds worth some 300 million US dollars. But this money quickly disappeared in local budgets, where it was used to pay delayed pensions, social benefits and salaries – to help maintain public spending until the elections.

“These same leaders… quickly apply international assistance to fill their coffers to cover existing budget shortfalls that are the result of their policies, with little directed for flood response. Now they ask for full payment of remaining funds?” the US embassy blog said.

Many economists fear that Bosnia’s economy and social services have become so frail that the country is heading towards total bankruptcy. But political analysts say that without new political leaders and ideas, no breakthrough should be expected after the elections.

“These are probably the worst elections in history of Bosnia and Herzegovina. We are caught between disaster and despair. All political parties proved to be the same and the elections are offering nothing new,” Eldin Karic, director of the “Account” network, said.

In a situation where Bosnia’s leaders and citizens alike show little willingness or ability to fix the country’s growing problems, some experts and officials believe it will again be up to the international community to decide whether to step in and stabilize the country with a more pro-active approach, or to let Bosnia go its own way, regardless of its potential to destabilize the Balkans.

“Bosnia and Herzegovina is increasingly becoming reminiscent of former Yugoslavia and its breakup: an economic and social crisis that escalated into a political crisis, which then escalated into violence. I just hope that both the international community and people in the Balkans have learned something since 1990s,” the senior international official said.

 

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Media summaries are produced for the internal use of the United Nations Office in Belgrade, UNMIK and UNHQ. The contents do not represent anything other than a selection of articles likely to be of interest to a United Nations readership.