Carl Bildt, the European Union's
High Representative, outlines the social, economic and political challenges
Economic success will be the key to a peace that
endures. But to go from the destroyed and militarised economies of today to the
peaceful and prosperous economies we seek to build for tomorrow will be an
enormous challenge both for all the peoples of Bosnia and for us in the
international community who have promised to help and assist.
We all know the
tragic economic situation of Bosnia today. The war has left some 1 million people
dead. Between 80 and 90 per cent of the population are more or less dependent
upon food aid. Industrial production is less than 5 per cent of pre-war levels.
Agricultural production is more or less destroyed.
If peace is to last, this
situation must be changed quickly. Soldiers that are now demobilised must be able
to return to work. Agricultural production must restart, and dependence on
outside food aid must be dramatically reduced. Infrastructure and industry must
be repaired and rebuilt.
The economies of war must be transformed into the
economies of peace. Working instead of fighting. Producing instead of receiving.
Co-operation instead of confrontation. Rebuilding as part of the process of
As High Representative, I have been given the task of
monitoring the implementation of the peace agreement, of co-ordinating the
different civilian, political, humanitarian and economic sides that will
determine whether peace will take hold after these terrible years of war. And for
these to succeed, there must be a genuine will for genuine reconciliation between
all of the parties to the war.
In this context, I would stress five points
that must be taken into consideration.
First: time is a commodity in short
When winter gives way to spring, and summer starts to come to the
plains of Bosnia, it must be obvious to everyone throughout Bosnia that peace is
beginning to change things for the better, that the international community is
starting to help in a way that shows, and that further political progress is
likely to bring further economic progress.
This is critically important.
There must be early action in Bosnia, action that must be visible and obvious and
important, to make clear that a start has been made, and that more will come as
the political process proceeds towards the fulfilment of peace.
task is to unite, not to partition, Bosnia. This means that our efforts must be
directed towards all of the country and all of its peoples according to the needs
of different parts of the country. And that means that our efforts should also
put a premium on co-operation and integration between the Federation and the Serb
Republic to help in bringing together what must come together in the months and
years to come.
There are obvious
problems that need to be tackled here. We must start a dialogue with the Serb
Republic. Sarajevo will be of particular importance in this regard. The survival
of Sarajevo as a united, multi-ethnic city in which Muslims, Serbs and Croats can
feel equally secure and at home is of key importance for the future prospects of
the whole of Bosnia as a multi-ethnic, pluralist and open society.
there is a clear relationship between the economic help we are ready to give and
the full respect for the peace agreement that we demand.
We must now operate
under the clear assumption that the agreements that have been signed by all of
the parties will also be fully implemented by all of the parties, and plan our
activities accordingly. There might well be bumps on the road in coming months,
but the direction in which everyone will be travelling should be clear. As we
progress, the situation will have to be re-assessed. Political developments will
be of particular importance in this regard. Let me mention the importance of
progress towards elections, the full respect for human rights and the work of the
International Criminal Tribunal for Former Yugoslavia.
Representative, following discussions with the Steering Board of the Peace
Implementation Conference, must then be ready to give the political guidance that
might be necessary. It should be clear that failure to fulfil the obligations
undertaken will have its impact on the future course of international assistance.
Fourth: It is primarily the efforts of Bosnia itself that will determine
economic developments in coming years.
No amount of international economic
assistance can ever help if there are not the right conditions for economic
activity to start, take hold and prosper. There is practically no limit to the
damage that bad economic policies and wrong structural measures can do to an
economy and to a society.
It is therefore of the utmost importance that the
governments of the Federation, as well as the Serb republic, begin as soon as
possible to develop the right macroeconomic framework for economic development,
and that they are ready to do this as much as possible in close co-operation. The
function of the High Representative, through the Joint Interim Commission, is
ready to offer its help also in this respect.
There must be clear property
rights. There must be sound money. There must be the freedom to trade and to
start businesses. There must be the legal framework necessary for an open and
prospering economy, and there must be the financial system ready and able to
support it. There must be sound public finances, with revenues sufficient to
cover all the expenditures that will be necessary.
If all of this is in
place, the efforts of the international community can make a most important
contribution to the economic development of Bosnia. But we must understand that
if these conditions are not there, no amount of assistance can help. The example
of Yugoslavia during the 1980s serves as a reminder of what might happen under
Fifth: No country can prosper without free and close
economic relations with its neighbours and the outside world.
Free trade is the key to medium- and long-term economic developments. It is
absolutely essential that there is free movement of goods, services, capital and
manpower between the Federation and the Serb Republic provided for in the
Constitution. But it is equally important that as many obstacles to free trade as
possible are removed. This includes obstacles between Bosnia and all of its
neighbours, as well as between Bosnia and the rest of Europe and the rest of the
And here the development of structural relationships between Bosnia on
the one hand and the EU on the other will be of critical importance, since they
will also serve to establish the regional context that will be so important for
future economic developments.
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©Kensington Publications 1996