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Pursuant to section 7 of Public Law 105-174, I am providing this
report to inform the Congress of ongoing efforts to achieve sustainable
peace in Bosnia and Herzegovina (BiH). This is the first semiannual
report that evaluates progress in BiH against the ten benchmarks
("aims") outlined in my certification to the Congress of March 3, 1998.
NATO adopted these benchmarks on May 28, 1998, as part of its approval
of the Stabilization Force (SFOR) military operations plan (OPLAN
10407). The Steering Board of the Peace Implementation Council (PIC)
subsequently adopted corresponding benchmarks in its Luxembourg
Declaration of June 9, 1998.
NATO, the Office of the High Representative (OHR) and my
Administration have coordinated closely in evaluating progress on Dayton
implementation based on these benchmarks. There is general agreement
that there has been considerable progress in the past year. The basic
institutions of the state, both political and economic, have been
established. Key laws regarding foreign investment, privatization, and
property are now in place. Freedom of movement across the country has
substantially improved. Fundamental reform of the media is underway.
Elections have demonstrated a continuing trend towards growing
pluralism. Nevertheless, there is still much to be done, in particular
on interethnic tolerance and reconciliation, the development of
effective common institutions with powers clearly delineated from those
of the Entities, and an open and pluralistic political life. The growth
of organized crime also represents a serious threat.
With specific reference to SFOR, the Secretaries of State and
Defense, in meetings in December 1998 with their NATO counterparts,
agreed that SFOR continues to play an essential role in the maintenance
of peace and stability and the provision of a secure environment in BiH,
thus contributing significantly to progress in rebuilding BiH as a
single, democratic, and multiethnic state. At the same time, NATO
agreed that we do not intend to maintain SFOR's presence at current
levels indefinitely, and in fact agreed on initial reductions, which I
will describe later in this report. Below is a benchmark-by-benchmark
evaluation of the state-of-play in BiH based on analysis of input from
multiple sources.
Military Stability. Aim: Maintain Dayton cease-fire.
Considerable progress has been made toward military stabilization in
BiH. Entity Armed Forces (EAFs) are in compliance with Dayton, and
there have been no incidents affecting the cease-fire. EAFs remain
substantially divided along ethnic lines. Integration of the Federation
Army does not reach down to corps-level units and below. However,
progress has been made through the Train and Equip Program to integrate
the Ministry of Defense and to provide the Federation with a credible
deterrent capability. Although it is unlikely to meet its target of
full integration by August 1999, the Federation Ministry of Defense has
begun staff planning for integration. The Bosnian Serb Army (VRS)
continues its relationship with the Federal Republic of Yugoslavia (FRY)
Army. Similarly, the Bosnian Croat element of the Federation Army
maintains ties with Croatia. In both cases, however, limited resources
impinge on what either Croatia or the FRY can provide financially or
materially; the overall trend in support is downward. In some areas,
the VRS continues to have certain qualitative and quantitative
advantages over the Federation Army, but the Train and Equip Program has
helped narrow the gap in some key areas. The arms control regimes
established under Articles II (confidence and security-building
measures) and IV (arms reduction and limitations) of Annex 1-B of the
Dayton Peace Accords are functioning. In October 1997, BiH and the
other parties were recognized as being in compliance with the
limitations on five major types of armaments (battle tanks, armored
combat vehicles, artillery, combat aircraft, and attack helicopters) set
forth in the Article IV agreement, which were derived from the Annex 1B
5:2:2 ratios for the FRY, Republic of Croatia, and BiH respectively.
The parties have since maintained armament levels consistent with the
limitations and are expected to do so in the future. A draft mandate
for an Article V agreement (regional stability) has been approved;
negotiations are due to begin in early 1999. Military stability remains
dependent on SFOR as a deterrent force.
Public Security and Law Enforcement. Aim: A restructured and
democratic police force in both entities. There has been considerable
progress to date on police reform due to sustained joint efforts of the
International Police Task Force (IPTF), Office of the High
Representative (OHR), and SFOR, which have overcome a number of
significant political obstacles. So far, approximately 85 percent of
the police in the Federation have received IPTF-approved training, as
have approximately 35 percent of the police in the Republika Srbska
(RS). All sides continue to lag in the hiring of minority officers and,
as the IPTF implements its plans to address this problem, tensions will
increase in the short-term. SFOR often must support the IPTF in the
face of crime, public disorder, and rogue police. Monoethnic police
forces have often failed to facilitate minority returns. In these types
of scenarios, SFOR's use of the Multinational Specialized Unit (MSU) has
been a force multiplier, requiring fewer, but specially trained troops.
At this point, SFOR's essential contribution to maintaining a secure
environment, to include backing up IPTF in support of nascent civilian
police forces, remains critical to continued progress.
Judicial Reform. Aim: An effective judicial reform program.
Several key steps forward were taken in 1998, such as the signing of an
MOU on Inter-Entity Legal Assistance on May 20, 1998, and establishment
of an Inter-Entity Legal Commission on June 4, 1998. The Federation
Parliament in July adopted a new criminal code. Nevertheless, the
judicial system still requires significant reform. Judges are still
influenced by politics, and the system is financially strapped and
remains ethnically biased. Execution of judgments, in particular
eviction of persons who illegally occupy dwellings, is especially
problematic. The progress made in the area of commercial law is
encouraging for economic development prospects.
Illegal Institutions, Organized Crime, and Corruption. Aim:
The dissolution of illegal pre-Dayton institutions. Corruption remains
a major challenge to building democratic institutions of government.
Structures for independent monitoring of government financial
transactions are still not in place. Shadow institutions still need to
be eliminated. The burden of creating institutions to combat fraud and
organized crime falls mostly to the international community and in
particular to the IPTF. SFOR contributes to the secure environment
necessary for the success of other international efforts to counter
these illegal activities.
Media Reform. Aim: Regulated, democratic, and independent
media. Approximately 80 percent television coverage has been achieved
in BiH through the international community's support for the Open
Broadcasting Network (OBN), which is the first (and so far only) neutral
source of news in BiH. Several television and radio networks have been
restructured and are led by new management boards. Most are in
compliance with Dayton except for some regional broadcasts. The
Independent Media Commission assumed responsibility for media monitoring
from the OSCE on October 31, 1998. Progress has been significant, but
BiH still has far to go to approach international standards. SFOR's
past actions in this area are a key deterrent against illegal use of
media assets to undermine Dayton implementation.
Elections and Democratic Governance. Aim: National democratic
institutions and practices. With the exception of the election of a
nationalist to the RS presidency, the September 1998 national elections
continued the long-term trend away from reliance on ethnically based
parties. The two major Serb nationalist parties lost further ground
and, once again, will be unable to lead the RS government. Croat and
Bosniak nationalist parties retained control, but saw margins eroded
significantly. In this regard, SFOR's continued presence will
facilitate conduct of the municipal elections scheduled for late 1999
but, as has been the case with every election since Dayton, the trend of
increasingly turning over responsibility for elections to the Bosnians
themselves will continue.
Economic Development. Aim: Free-market reforms. While the
process of economic recovery and transformation will take many years,
some essential groundwork has been laid. Privatization legislation and
enterprise laws have been passed, and banking legislation has been
partially passed. Fiscal revenues from taxes and customs have increased
significantly. Nevertheless, the fiscal and revenue system is in its
infancy. Implementation of privatization legislation is slow and the
banking sector is under-funded, but there are signs of development in
GDP. There has been a marked increase in freedom of movement, further
enhanced by the uniform license plate law. SFOR's continued
contribution to a secure environment and facilitating freedom of
movement is vital as economic reforms begin to take hold.
Displaced Person and Refugee (DPRE) Returns. Aim: A
functioning phased and orderly minority return process. While there
have been some significant breakthroughs on DPRE returns to minority
areas, such as Jajce, Stolac, Kotor Varos, Prijedor, Mostar, and
Travnik, the overall numbers have been low. In some areas where
minority DPREs have returned, interethnic tensions rose quickly. Some
nationalist political parties continue to obstruct the return of
minority DPREs to the areas they control. Poor living conditions in
some areas present little incentive for DPREs to return. The Entities
are using DPREs to resettle regions (opstinas) that are of strategic
interest to each ethnic faction. SFOR's contribution to a secure
environment remains vital to OHR efforts to facilitate minority returns.
Brcko. Aim: A multiethnic administration, DPRE returns, and
secure environment. Freedom of movement in Brcko has improved
dramatically. Citizens of BiH are increasingly confident in using their
right to travel freely throughout the municipality and the region.
Police and judicial elements have been installed, but the goal of
multiethnicity in these elements still has not been realized. About
1,000 Federation families have returned to the parts of Brcko on the RS
side of the Inter-Entity Boundary Line, but few Serb displaced persons
have left Brcko to return to their pre-war homes. SFOR support will be
a critical deterrent to the outbreak of violence during the period
surrounding the Arbitrator's decision on Brcko's status anticipated for
early in 1999.
Persons Indicted for War Crimes (PIFWCs). Aim: Cooperation
with the International Criminal Tribunal for the former Yugoslavia
(ICTY) leading to the transfer of PIFWCs to The Hague for trial. Thanks
to action by the Congress, the Secretary of State now has the ability to
offer rewards of up to $5 million for information leading to the arrest
or conviction of PIFWCs. Of the 81 people indicted publicly by the
Tribunal, only 29 -- 36 percent -- are still at large. The two
highest-profile indictees, Karadzic and Mladic, are among them.
Bosniaks are cooperating with the ICTY, but the failure of the RS to
support the ICTY is a major obstacle to progress. Bosnian Croats have
cooperated with respect to the surrender of all but two public
indictees, but have not cooperated fully with respect to the Tribunal's
orders that they turn over documents needed for the fair trial of a
number of indictees. SFOR continues to provide crucial support in the
apprehension of PIFWCs and for ICTY exhumations.
In my report to the Congress dated July 28, 1998, I emphasized the
important role that realistic target dates, combined with concerted use
of incentives, leverage, and pressure on all parties, should play in
maintaining the sense of urgency necessary to move steadily toward an
enduring peace.
The December 1998 Peace Implementation Council Declaration and its
annex (attached) offer target dates for accomplishment of specific tasks
by authorities in BiH. The PIC decisions formed the background against
which NATO Defense Ministers reviewed the future of SFOR in their
December 17 meeting. Failure by Bosnian authorities to act within the
prescribed timeframes would be the point of departure for more forceful
action by the OHR and other elements of the international community.
Priorities for 1999 will include: accelerating the transition to a
sustainable market economy; increasing the momentum on the return of
refugees and displaced persons, particularly to minority areas;
providing a secure environment through the rule of law, including
significant progress on judicial reform and further establishment of
multiethnic police; developing and reinforcing the central institutions,
including adoption of a permanent election law, and the development of
greater confidence and cooperation among the Entity defense
establishments with the goal of their eventual unification; and pressing
ahead with media reform and education issues.
In accordance with the NATO Defense Ministers' guidance in June
1998, NATO is conducting a series of comprehensive reviews at no more
than 6-month intervals. The first of these reviews was completed on
November 16, 1998, and recently endorsed by the North Atlantic Council
(NAC) Foreign and Defense Ministers. In reviewing the size and shape of
SFOR against the benchmarks described above, the United States and its
Allies concluded that at present, there be no changes in SFOR's mission.
NATO recommended, however, that steps begin immediately to streamline
SFOR. The NAC Foreign and Defense Ministers endorsed this
recommendation on December 8, 1998, and December 17, 1998, respectively.
The Defense Ministers also endorsed a report from the NATO Military
Authorities (NMAs) authorizing further adjustments in SFOR force levels
-- in response to the evolving security situation and support
requirements -- to be completed by the end of March 1999. While the
specifics of these adjustments are still being worked, they could amount
to reductions of as much as 10 percent from the 6,900 U.S. troops
currently in SFOR. The 6,900 troop level already represents a 20
percent reduction from the 8,500 U.S. troops deployed in June 1998 and
is 66 percent less than peak U.S. deployment of 20,000 troops in 1996.
The NATO Defense Ministers on December 17, 1998, further instructed
NMAs to examine options for possible longer-term and more substantial
adjustments to the future size and structure of SFOR. Their report is
due in early 1999 and will give the United States and its Allies the
necessary information on which to base decisions on SFOR's future. We
will address this issue in the NAC again at that time. Decisions on
future reductions will be taken in the light of progress on
implementation of the Peace Agreement. Any and all reductions of U.S.
forces in the short or long term will be made in accordance with my
Administration's policy that such reductions will not jeopardize the
safety of U.S. armed forces serving in BiH.
My Administration values the Congress' substantial support for
Dayton implementation. I look forward to continuing to work with the
Congress in pursuit of U.S. foreign policy goals in Bosnia and
Herzegovina.