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The dream of peace in the Balkans cauldron

Fitzroy Maclean, the great soldier-diplomat who organised supplies for Marshal Tito, once observed that the many diverse people of former Yugoslava had long mastered the art of playing great powers off against one another – ‘East against West, Rome against Byzantium, Pope against Emperor, Teuton against Turk’ – but that ultimately, it was the battle for national independence that came first, ‘pursued with a violence, a devotion, a turbulence and a resilience all of their own’.

People gather at the House of Lords to mark #RememberingSrebrenica week

Today, many now fear that turbulence and violence is set to return. In a deepening constitutional crisis, the Bosnian Serb leader, Milorad Dodik, a member of the country’s tripartite presidency has deadlocked the national budget, threatened to begin withdrawing from the national institutions that hold the country together and led banned celebrations of Republica Srpska in Banja Luka, where centre-stage appeared Vinko Pandurevic, the former commander of a notorious unit accused of war crimes.

On stage, Dodik declared “There cannot be freedom for the Serbian people if they do not have a state”. In the Chambers of local power, the Republika Srpska parliament has passed laws allowing creation of parallel institutions and army while at federal level, hundreds of decisions are now blocked at Council of Ministers.

Tensions have risen before but this time, while Dodik is not seen as having much strategy beyond the October elections, secession plans for Republica Srpska seem more detailed, more specific than before. And so tensions are running high. Benjamina Karic, the charismatic young law professor and now Mayor of Sarajevo explained, ‘My students ask me every Friday, will there be a war? I talk to the market traders and they say ‘My God, will we have to go through what we went through in the 90s?’ Other ministers are blunt; ‘I don’t think we have had a crisis so serious since the war. And the support of Russia and Serbia is quite clearly aimed at undermining the Euro Atlantic alliance’.

Dodik insists there are no plans for secession or conflict. When we meet at the Presidency building, along with his co-President, Sefik Dzaferovic, he insisted in what diplomats might call, ‘a frank exchange of views’ that Republika Srpska ‘respected Dayton’ the peace treaty that ended the war, and argued that he is simply returning to the proper constitutional position upset by his bete noire, the former UN High Representative, Paddy Ashdown.

‘We have no plans for secession’ he insisted, ‘maybe the Muslims do. We don’t. The problem is the foreigners come and impose the law….We do not have a secession plan. We will not endanger the peace. But we’ll continue fighting for our constitutional position’.

The Foreign Affairs Committee meets the UN High Representative

Others are less sanguine about what Mr Dodik is up to; ‘Dodik’s strategy is pretty simple’ explained one seasoned observer, ‘Take three steps forward and then one to two steps back.

‘But, they (Dodik) want to keep BIH in a dysfunctional state to present the argument we can’t live together and then divide the country’.

The ‘Russian hand’

Given the chaos many understandably look for the influence of Russia. And local analysts are pretty clear that ‘the hand of Russia is at work here’. Russia’s GRU is bullish and lively. The Russian deputy defence attache, it is said, is rather proud of his Spetznatz t-shirt. At the recent illegal Republica Srpska ‘national holiday’ march, the Russian-linked biker gang, the Night Wolves made a guest appearance along with a few with a few personalities from the Russian mercenary outfit, the Wagner Group. A recent Night Wolves tour of Orthodox monasteries was clearly a reconnaissance exercise.

“On Russia” explained one local mayor “it’s very clear they want to take back what they lost…But BIH is the worst case because if something happens here it will spill over.”

This of course did not happen overnight, as local journalists observe; “People in RS don’t know anything about Russia. Russian influence began with low-level oligarchs doing deals and starting to pay off the politicians. Then they build a case for investment from non-transparent countries like Russia. RS have tycoons tied to institutions.

“That’s why you need to separate the corrupt elites from their money. That’s the only way to change their behaviour. Oligarchs are diversified – they don’t want to be tied to one person so they want to take the business into the legal sphere”.

But while Russia may have pre-positioned a few on-ramps and fine-tuned it’s disinformation service, most believe as one diplomat put it, ‘This is a low investment high yield place for Russia. They don’t have to do much to cause chaos. So they do the minimum to keep the pot boiling.’

That was exactly the view of another minister; “Russia doesn’t need to make major investments. It’s quite enough for Putin to meet Dodik. Dodik is very honest about his approach. He’ll say I do what I’m supposed to do which is a win elections. That’s what I’m here for.”

The root of all evil

In truth, the bigger threat here is not Russia but greed, served by a klepto-capitalism that has metastasized since the war.

The vote buying business is a well organised trade for the simple reason that political patronage stretches so far into the jobs market. One recent poll revealed that nearly 45% of people agreed with the statement that ‘political connections are the most important factor for success’.

The playbook is fairly simple.

Dominant parties have a firm grip on every lever in the system and milk private benefits by manipulating public funds through the BiH’s huge Socially Owned Enterprises (SOE’s). In last week’s Corruption Perception Index (CPI), Bosnia and Herzegovina was ranked 110th out of 180 countries. That’s on par with Mongolia, Malawi and Thailand. Azerbaijan was the only European country with a lower rating. Just as depressing was Transparency International’s observation that “No progress has been made compared to last year.”

At the edges, this might be linked to organised crime groups which are effective because their networks are far more collaborative than the politicians. Their roots run deep as old para-military routes than ran arms and supplies during the war serve well to move drugs, weapons and people. Ski resorts have become arenas for Serbian gangs to settle scores.

But the dimensions of the problem confronting BiH are bigger than this.

All in all, in value, the five most valuable Socially Owned Enterprises are worth half of GDP and 550 Socially Owned Enterprises (SOE’s) account for a massive 20% of economic output and employ 80,000 peope; that’s about 11% of the country’s total employment.

Different SOE’s are said to be dominated by different political parties and these firms dominate energy, mining, telecoms, transport and utilities. Almost half of these firms are illiquid and as many as 15% are insolvent. So many SOEs generate losses that their aggregate debt is equivalent to a quarter of GDP. As a result they are heavily subsidised by the government.

What helps prop up the chosen firms is an annual Government procurement bill of about 3 billion KM. That’s equivalent to over 8% of GDP. Contracts quite clearly reward a particular group of companies which in turn are known to make significant political donations

But this system is wired into the jobs market. As many as three quarters of SOEs employees are hired without advertising. So sadly, many public sector employees are basically employed through an nepotistic relationship too often without any qualifications try to do the job. But a job at a state owned firm comes with the expectation that you and your family will vote the right way. Even the manager of a nursery might need to make the right promises at election time to get or keep a job. Votes can be bought, it is said, for as little as 10 Euros. ‘The tragedy’ said one diplomat ‘is how cheap democracy can be brought.’.

The triggers of war

Could Bosnia Herzegovina descend into war? Perhaps there are two key triggers in the months ahead; any attempt to delay elections, and – the nuclear option – any calls by Republica Srpska politicians for Serbian soldiers to exit the armed forces.

Foreign Affairs Select Committee at BiH Army House

The threat to the country’s military integrity is just as serious. Most defence and security analysts think that perhaps the majority of Serbian army personnel would follow any call to withdraw if Dodik made it. As one senior security official explained, ‘The senior military know it’s the politicians who decide who gets promoted, who gets to retire on what rank and with what pension. That’s a big incentive.’ But, a call for military defections would be the clear signal that civil war was imminent.

The tragedy & potential for growth.

There are so many tragedies here. It’s the curse of all borderlands that they are become battlegrounds of bigger neighbours, not least because ambitious chiefs so often succumb to the temptation to invite in one side or the other to advance their personal cause. And in this wearying new age of resurgent ethno-nationalism, it is no surprise that what was once a melting pot has become a boiling pot of tensions. Bosnia Herzegovina was not only the place where the 20th century’s first great War began with the assassination of the Archduke Ferdinand on a street corner by the Miljacka river that slices through old Sarajevo, but the place of the last European genocide less than a hundred miles away in Srebenica where 8,000 Muslim men and boys were slaughtered.

Yet for centuries Sarajevo was known as the ‘Jerusalem of Europe’. A place where a 16th century Muslim ruler, Pasha Hadim Ali, welcomed the expelled Jews of Spain and Portugal to live, trade and worship. At a time of European history when the religion of the ruler defined the religion of the country, BiH was a place where Muslims, Jews and Christians lived together, worked together, loved together. Amongst the Ottoman souk of Sarajevo, now a pleasant place of old stone arches, shops that look like ski chalets, superb baklava and strong coffee, the mosques and churches and synagogues are neighbours. Still today, through the air comes the call to prayer and the peal of church bells. The Foreign Minister Bisera Turkovic tells a story about the graves of her grandparents engraved with the symbols of Judaism, Christianity and Islam.

But amongst the greatest tragedies today is the lost potential.

On current trends, it will take another thirty years for living standards here to start converging with European averages. Hence people – especially young people – are leaving in their thousands. The population is collapsing. ‘Once parents worked hard to stop their kids from leaving’ said one minister to us; ‘Now they are working to get them out’. People are not waiting for Europe to come to them. They are going to Europe.

Yet, it doesn’t have to be this way. One business leader put it to us like this; “It’s only a matter of time before this is an economy growing at 8% a year”.

But that potential is chilled by the crisis. One local mayor was blunt; “Investors are now slowing down on construction because they are seeing if there is going to be a war or not”.

Yet this country needs a huge infrastructure programme – and could afford to have one. ‘Sometimes’ joked one senior diplomat ‘I say the Austrians didn’t do what they should have done’. In the long years of the Austro-Hungarian Empire, the basics of roads and railways were simply not constructed. The country is hard to get around and the digital infrastructure is woeful. Yet, the national coffers are relatively healthy because of an effective nation-wide sales tax implementated some years ago and relatively low levels of borrowing. The country could easily afford to scale up debt for investment from today’s 40% of GDP to something like 60% of GDP (that might be worth around €3 billion alone). Together with international loans from the IMF’s new Resilience & Sustainability Trust and the World Bank, this could route billions into renewable energy, road, rail and digital network construction. That would provide a low cost, secure alternative to Chinese state backed investment or Russian attempts to maintains BiH’s energy dependency on Russian gas and petro-chemicals.

UK Strategy

So what should the West do? And what role does the UK play? Here’s five thoughts.

1. Above all, we have to make sure October’s elections proceed. Without them, the rules based order such as it is, is going to crumble and the deadlock will become truly dangerous. A democracy cannot be allowed to disappear from Europe.

2. Second, the West needs new carrots and new sticks to put some kinetic energy into BiH politics. BiH is governed by what is in effect a peace deal not a constitution. Its complicated power sharing agreements across four layers of government isn’t even compatible with rulings from the European Court of Human Justice because it prescribes roles for people of a handful of religions. It has, as one put it to us ‘thirteen brakes and one accelerator’. So the EU and UK together with the IMF (in which the Europeans and Americans are the decisive shareholders), World Bank and European Bank of Reconstruction & Development need to draw up a bold and simple plan to transform the nation’s infrastructure, translate this into what could mean for growth of citizen’s living standards, and put together a financing package that includes low interest bonds (0.5-1.0%) to unlock the country’s spare debt capacity.

But the deal must demand progress on the fourteen basic economic reforms the IMF proposed last year. This isn’t some wild plan for austerity. It’s a plan for basic things like a national e-signature system that could transform e-commerce and procurement reform to create better safeguards against corruption. Right now, the West has weakened our own hand by throwing unconditionally hundreds of millions of dollars at BiH and asking for nothing in return. This is unwise. We need an infrastructure and reform plan well before the October elections and we need to promote the hell out of it so voters know what could be on offer if their politicians get their act together. And where politicians continue to frustrate political progress in order to protect corruption, the UK, EU and US need to be quicker and better coordinated in targeting bad actors with sanctions that deny them access to ill-gotten gains.

3. Third, we need to step up judicial and police training. We heard time and time again how the judicial system has been captured by political elites. This is hard to break – but giving up is not an option if we want to see a measure of prosperity return. One senior politician was very clear with us that there would be “No progress without without progress on judicial reform. But some leaders prefer war to court and jail. Without a serious fight against organised crime and corruption we won’t stop the brain drain”.

4. Fourth, we need to re-energise the BiH progress towards NATO membership. Politicians here are realistic about both the politics and practicalities of actually joining. One defence source told us “Joining NATO is currently unrealistic. I would be the happiest person if it could happen but right now it will cause complications”. The conditions set out for membership (even basic stuff like a transparent defence budget) just aren’t in place and won’t be for some time. But we could radically step up joint training on the lines of the six week exercises of the past and the UK could lead by example by redeploying a mix of 60+ personnel into EUFoR which in turns requires a new UK agreement with the EU.

5. Finally, as part of NATO-led plan for defence modernisation we need to radically enhance on the ground, NATO hybrid warfare capabilities and radically boost the NATO Stratcomm presence like our capabilities in place in the Baltic. This would entail transforming monitoring and analysis of disinformation, development of a proper counter narrative to the ‘Serbian world’ visions of Aleksander Vulin, the Serbian interior minister and close confidant of President Aleksandar Vucic, which imagines the formal political and institutional unification of all ethnic Serbs in the Western Balkans, a proactive supply of digital assets, facts and resources to free media and civil society groups to flood digital channels and engage with the nonsense. As one security source put it to us, ‘Creating counter disinformation is the key. We are very vulnerable to disinformation from Belgrade. And we need to strengthen our capacity in cyberspace’.

That support should extend to coordinated measures to support a free and independent media because as one journalist made clear; ‘The media is becoming dependent on public companies (which are politically controlled). What’s needed is to strengthen independent media. We can’t survive alone in the market. Threatening is frequent in RS. It’s harder to be a journalist today than it was during the war. And it’s much easier to manipulate ethnic concerns that embark on any kind of reform”.


The buildings of Sarajevo today are riddled with the pock marks of small arms fire and shrapnel. The pavements are still scarred by ‘roses’ where residents have filled the splatter-marks of the lethal landing mortars with red wax to commemorate the dead. The past is not history here, not yet. Many politicians still behave as if politics is war by other means. It will take another generation of politicians to move beyond the past and decide the prize of the future is worth some compromise. But in the heart of Sarajevo is a potent symbol of hope.

Sarajevo’s city hall and library were destroyed in the war. There now stands a beautiful rebuilt centre-piece around a yawning high atrium in the Ottoman style. Inside are pictures and artefacts from the war crimes trials, heaps of barbarous brass ammunition cartridges and on its doors, a plaque enscribed with the words ‘do not forget! Remember and warn!’.

Bosnia Herzegovina will survive for the simple reason that it is a nation of survivors. Walking from dinner one night I fell into conversation with a man who had joined the Jugoslave National Army as a lad of 18, deserted after the bloody Croatian war and came home to defend Sarajevo during the terrible siege, a four year ordeal that lasted three times longer than the battle for Stalingrad.

From the peaks of the Nistrian Alps that surround the town, mortars and rockets bombarded Sarajevo, firing upto 4,000 shells into the smashed cauldron of the old town every day. They were aiming at the markets to kill civilians while snipers picked off children playing in the streets. The town was cut off for 1,425 days.

Notoriously, the West vetoed arms supplies to avoid what Douglas Hurd said would become ‘a level killing field’. The result was tantamount to abandoning three people to a room, one with a gun, one with a knife and one with nothing – and locking the door.

‘What on earth did you eat’ I asked. My new friend smiled. ‘We ate everything. Anything we could find’. With typical ingenuity the soldiers built a tunnel – the ‘tunnel of life’ as it’s known – under the airport runway to smuggle in supplies, and, one day, Bruce Dickenson from Iron Maiden for an impromptu concert (he is still a hero here). Heavy metal was good for morale.

But what the story underlines is the sheer resilience of the people here, living in a proud, phlegmatic patient way dreaming of the quiet miracle of a normal life. ‘We who have seen war know how to appreciate peace’ said one senior minister to us. The West now needs to back the peacemakers. As a nation seeks to bury it’s past and build a future.


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