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Challenges and Opportunity – Assistant Secretary James O’Brien Speech at University of Sarajevo
21 MINUTE READ
February 2, 2024

Good afternoon.  Thank you all for taking time to be here today.  I’d like to express my appreciation to the leadership of the University of Sarajevo and of the Faculty of Political Science, Dr. Škrijelj and Dr. Turčalo, and to the University team for hosting us today.

I am also very pleased to be here with Ambassador Murphy, who has been an outstanding advocate for US interests and for the people of BiH as you seek a better life with BiH as a part of a Europe whole and free.

My experience with BiH started at a difficult point in the country’s history.  In January 1992, I was assigned to be the US State Department lawyer responsible for the laws of war, crimes against humanity, and genocide.  When war came to Bosnia and Herzegovina that April I catalogued the crimes, collected witness statements and evidence, and helped create the International Tribunal.  Once the US started to lead peace talks, I served as the lead lawyer on the peace talks between Bosniaks and Croats, leading to the Washington Agreement in 1994, and then was involved in Dayton in 1995 and as the presidential envoy under President Clinton.  I started coming to Sarajevo and much of the rest of Bosnia and Herzegovina almost 30 years ago.  I love to return and see the progress in the country that I first saw through witness statements.

Today I want to speak – as a long-time friend of the country, all the country – about an opportunity, about a serious threat that comes from within the country, and then to propose a course of action.

My concern is simple: BiH is at risk of missing the next train to Europe due to the self-interest of its political leaders.  It also risks being torn apart by secessionist threats from the Republika Srpska (RS).

 

OPPORTUNITY

The US has always wanted to see the Western Balkans integrated into Euro-Atlantic institutions, integrated into a Euro-Atlantic future.  It is true that much progress has been made, in the reconstruction of BiH itself to the entry of states across the region affected by the wars of the 1990s, into the EU and into NATO.

We are coming to another key moment of opportunity for progress.

The EU has announced its intention to open accession talks with 9 countries.  As President von der Leyen said last week, in March there will be pivotal moment for BiH when the European Council will decide whether BiH is ready to take the next step.  The United States fully supports BiH’s integration into Euro-Atlantic institutions, including the EU.  Progress in enlargement talks with Ukraine and Moldova creates momentum of a kind we have not seen since the last major round of EU enlargement in 2007.  The opportunity is real, but once this train moves there may not be another for some time.

Enlargement will take time, however.  That is why the EU has announced its intention to create a Growth Plan for the Western Balkans.  It is simple and available soon: in exchange for reforms the EU will allow BiH citizens to join parts of the Single Market.  It will even provide some funding to help with the reforms and integration, probably just under 1 billion euro for BiH alone.

Last week, the other five Western Balkans states met in Skopje (with BiH sending a short video). They agreed with the EU and US that this year they would implement two practical steps, one to reduce fees for moving funds and one to expand rapid movement of goods through Green Lanes.  Three states also agreed to start implementing measures for a Berlin Process agreement that will let people work across borders.  I hope that BiH can sign up to both.  These steps can start real economic growth, with businesses and people moving up the value chain and preparing to be part of Europe.

Why does this matter?  Because BiH is at risk of failing.  By some measures 47% of your population doesn’t live here.  There is no greater indictment of political leadership than that.  What’s more, according to “The Catch-Up Index,” BiH’s per capita GDP is just one third of the EU average, and there has been very little convergence over the last decade.  In addition to that, BiH attracts the lowest share of foreign direct investment relative to its GDP of any country in the Western Balkans.  The youth unemployment rate is around 30 percent.  I could go on, but the people of this country know these things better than anyone else.  They live the reality of these figures every day.  The opportunity provided by the EU can change that, if BiH can overcome its current challenges.

 

THREAT FROM INSIDE

Of all the challenges confronting BiH, none is greater than escalating rhetoric, especially secessionist talk.

Let me be perfectly clear on this point: the United States strongly supports the sovereignty, territorial integrity, and multiethnic character of Bosnia and Herzegovina.  Calls to create new boundaries or change internationally recognized borders, attempts to stoke and celebrate ethnic and nationalist violence, defiance of core institutions like the Constitutional Court – these actions anti-Dayton, they are unconstitutional, and they are dangerous.

We will respond to anti-Dayton and unconstitutional actions, and we will not allow malign actors to tear the state apart.

Now, this is not personal.  I have known and worked with many leaders in BiH over almost 30 years.  This is a matter of the interests of both our countries.  Some leaders seem to feel that they are larger when their names are said by international officials, and they enjoy attacking international representatives by name.  This is foolishness.  In my remarks I will separate the behavior from the person, naming individuals only when necessary.

It is true that Dayton created a complicated government structure with many opportunities to block initiatives, but it also pointed a way forward.

  • It requires groups to resolve disputes through the Dayton system, not outside it or by threatening to leave it.
  • It makes clear that BiH’s future is in Europe and that the state will evolve as needed to help that happen. The state-building process that followed Dayton’s signature, and that resulted in reforms to BiH’s state structure over time, was and is part of Dayton.
  • The Constitution also repeatedly says that all officials and institutions in BiH will uphold European standards and international law as part of their official duties.

This is the structure and fabric of the Constitution, and any official who suggests that there is some other source of law is deviating from Dayton.  I know.  I was there.  I was the lawyer who worked with the parties at Dayton to write it.

So, it pains me, as the lawyer I once was, to see false arguments made by irresponsible politicians and the lawyers they hire with your money.  They are arguments that would drag the country back, not to the initial peace, but to the war that preceded it.

Pardon me while I walk through a few provisions to illustrate the point.

 

One Country

The Constitution affirms that BiH is one country, with no right of secession or division.  Article I, paragraph 1 – kind of where things start – says that:

The Republic of Bosnia and Herzegovina, the official names of which shall henceforth be “Bosnian and Herzegovina” …shall continue its legal existence … with its internal structure modified as provided herein… .

The “internal structure” appears in paragraph 3 referring to “two Entities,” the Federation and the Republika Srpska, as within BiH.  BiH was not and is not a union or confederation of two states.  The entities are subordinate to the state of Bosnia and Herzegovina, and to be crystal clear, the Republika Srpska is not a state and does not enjoy the attributes of statehood.

By continuing the legal existence of its predecessor, BiH maintained its role in international organizations and agreements.  In 2001, BiH signed the Agreement on Succession Issues of the Former Socialist Federal Republic of Yugoslavia (SFRY), which was ratified by the BiH Parliamentary Assembly and assigned state property to BiH, not to the Entities.    There’s a way to discuss ownership of property by bringing it up in the relevant institutions.  Still, it’s clear that the starting point is: that property belongs to the state.

The Constitution also made clear that BiH was to allow for the unrestricted movement of people, goods, services, and capital inside the country.  Article 1, paragraph 4 says:

Neither Entity shall establish controls at the boundary between the Entities.

Some are now talking about RS independence or the “independence of the RS within BiH,” and about imagining controls at the IEBL.   This invents an “Original Dayton” that promises to bring back the roadblocks, harassment, and barricades featured in the war in place of the words of the actual Dayton, which removed them.  This is laughably bad law but dangerous in reality.

 

State Institutions

A word about the responsibilities exercised by the BiH government.  At the end of the war, everyone knew that the state government, coming together under a new constitution, would need time to get ready for all tasks required to govern a country emerging from a destructive war.

Therefore, many responsibilities were left where they were but with the clear understanding that the BiH government would take on more, as agreed through constitutional procedures (as happened often in the early 2000s) and as needed.  The United States has worked hard to help political leaders build what Dayton authorizes over the years so that today BiH has a single armed forces, a single intelligence agency, and other institutions necessary for the state to fulfill its responsibilities to its citizens.  This constitutional procedure is outlined specifically in Article III, paragraph 5 of the BiH Constitution.  It provides for new authorities and institutions as agreed, as appear in other parts of the Agreement (including property, return of the displaced, and elections).

I want to call attention to one part of the provision:

Bosnia and Herzegovina shall assume responsibility for such other matters as … are necessary to preserve the sovereignty, territorial integrity, political independence, and international personality of BiH….

This is an authority intended to evolve with circumstances, especially as BiH itself evolves to join Europe.  The state government must serve as a backstop for BiH to carry out the responsibilities necessary to fulfill the Western Balkans Growth Plan and EU accession processes.  Anyone who wants to prevent the functionality of those state institutions that exist or to strip the state government of the ability to carry out the reforms needed to implement Europe’s four freedoms is making Bosnia less free, less prosperous, and less European.

 

Courts and European Law

If there’s any disagreement about whether the institutions are exceeding their authority, Dayton has an answer: take it to court.  Article VI, paragraph 3(b):

The Constitutional Court shall also have appellate jurisdiction over issues under this Constitution arising out of a judgment of any other court in Bosnia and Herzegovina.

It’s simple language.  The Constitutional Court is the final, supreme decision-maker on any legal issue that implicates the Constitution.  It does not matter whether the initial judgment was made by a court sitting in the Federation, the RS, or a municipality.  I understand that people don’t like losing in court, but that, and abiding by those rulings, is part of life in a democratic state that respects the rule of law.

But when people lose, they attack the judges, especially the international judges who sit on the Constitutional Court.  Their presence, too, was part of Dayton (Article VI(1)(b)), and their presence makes sense.  BiH courts interpret the law of the European Court of Human Rights (ECHR), so it is important to have judges who are expert in that law on the court.    The debate about whether to have international judges deciding BiH cases is really about whether to have international judges involved earlier or later.  The decision in Dayton was to get people their rights sooner rather than to wait.  There is little doubt that BiH has benefited from the presence of international judges on its Constitutional Court, and the United States does not support their removal.

If people feel otherwise then this issue can be addressed when BiH is evaluated on its path to the EU.  But I don’t think today is that day.

Many people point to the Dayton Constitution’s flaws as the source of BiH’s problems today.  I know the Dayton Constitution is not perfect, but it was part of a comprehensive agreement that stopped a war and has so far kept it stopped – unlike nearly every other conflict that broke out at the same time.  It is easy for Dayton’s critics to forget this.  We must also not forget that during the period immediately following the signing of Dayton, significant, meaningful progress was achieved – from reconstruction of the war-torn country to building of state-level institutions necessary to chart the country’s course towards Euro-Atlantic integration.  Dayton is not the problem; the country’s political leaders are the problem.

 

OHR

Let me now take a moment to address false claims about the Office of the High Representative.  Dayton includes Annex 10, in which the Parties “request the designation of a High Representative” who would have “final authority … regarding interpretation of this Agreement on the civilian implementation of the peace settlement.”  This includes what are called the Bonn Powers, a plenary and far-reaching authority, which he can and should use when necessary.  When he does, the United States will support him.

Some say that the UN Security Council must appoint the High Representative.  This is wrong.  Under Dayton neither international troop presences nor the OHR were to be decided by the UNSC.  When the UN Secretary General was asked this question just last July, he provided a clear and definitive answer: the Peace Implementation Council Steering Board is the relevant body for the appointment of the High Representative.  Any other answer is flat wrong.

 

WHAT’S AT STAKE?

All the misleading, false claims have a clear objective: to undermine the peace agreement, including state-level institutions, and to enable some to cling to power no matter the price paid by regular citizens.  Karadzic, Krajisnik, and others tried the same approach in the 1990s.  We will not allow this to happen.  I’ll repeat what Ambassador Murphy has said:  the United States is resolute in its commitment to the territorial integrity, sovereignty, and multiethnic character of Bosnia and Herzegovina.

Leaders should be fostering reconciliation, making compromises, and bringing to BiH the economic prosperity the citizens of this country want and deserve.  Instead, nationalist politicians are attempting to weaken institutions, threatening succession, or fanning the flames of distrust and division.

Why do they do this?  Study after study has shown that BiH’s economy suffers under the weight of political instability.  It is hard not to notice that while the vast majority of citizens struggle to make ends meet, some political leaders and their families seem to be getting richer by the day.

And where does their money come from?

BiH collects among the highest revenues as a share of GDP in the world.  Instead of funding quality public services, the money disappears into private pockets, or it is used to maintain vast political patronage networks.  The public sector provides 44 percent of all formal jobs in BiH; this is one of the highest figures in Europe.  Those who work in the public sector or rely upon it for contracts from governmental entities become beholden to political leaders and political parties.  The result is that the citizens of BiH find both their political and economic freedom limited, with decisions made by political leaders who have no interest in making the changes necessary to help the people they claim to represent or to move BiH towards Euro-Atlantic integration.

Let’s take some current examples.  The wife of the president of SDA was recently removed as the Director of the Sarajevo University Clinical Center, one of largest hospitals in the country.  During her tenure, doctors were pressured to support SDA or were driven out of their leadership positions.  The agenda was political, not patient care.  The SDA was also involved in the notorious ventilators case, and when they were in power, the SDA’s leaders exploited BH Telecom for personal gain and to entrench their own patronage networks.

In the energy sector, we see HDZ BiH leader Dragan Covic blocking the Southern Interconnection natural gas pipeline with Croatia.  He would replace the transmission system operator – a well-established Federation-owned company with the technical expertise, resources, and project documentation to execute the project – with a currently non-existent company that would be under his control for his own political and financial benefit.  This is cynicism, against the public interest.

I keep a photo of the repaired old bridge in Mostar on the wall of my office to remind me that some things have been fixed but that the city remains broken, trapped in a divided past.  A leader genuinely committed to BiH’s European perspective would be taking steps to heal the wounds of the past and promote reconciliation.  Dragan Covic is not acting that way, and young people are leaving Herzegovina for opportunities elsewhere.

And of course, Milorad Dodik and his SNSD party have been steering contracts towards his family and cronies for years.  Allegations of misconduct across various RS industries abound, from non-competitive contracts awarded to firms under his family’s control, to Mr. Dodik’s sanctioned media station ATV.

Once in office, Mr. Dodik awarded himself a slush fund of 56.5 million KM ($28.7 million) for the RS president’s office, a more than 400 percent increase from the previous year.  At the same time, Mr. Dodik has been looking outside the governing institutions of Bosnia and Herzegovina for additional funding.  After months of desperate attempts to secure funding from sources such as Russia, Hungary, and the PRC, Mr. Dodik pressured local banks into providing monetary support via domestic bond issuances.  These are the equivalent of high-interest loans.  This is not sustainable.    Voters in the RS have a right to know how much they owe, on what the funds will be spent, and how they will be paid back – including whether any of the companies or property the RS has is put up for collateral.  Those who provide this money should be on notice that we are watching closely.  They should not take it for granted that they will be paid back or be able to take the collateral.

These financial shenanigans are why US sanctions have focused not only on anti-Dayton behavior and activities, but also on politicians, their family members, and associates who get rich from their political positions.  We will continue to wield our authorities when the security and stability of BiH are threatened, when there is a significant risk of obstructing the implementation of the Dayton Peace Agreement, or when there is credible evidence of corruption.

 

A SUGGESTION

This brings me to a suggestion: BiH’s ability to deliver the EU’s four freedoms – of people, goods, services, and capital – should be strengthened.  This means the enactment of measures that would stop the self-dealing that typifies too much politics here, such as the recent deeply flawed Laktasi Agreement; agree to forego the vetoes that inhibit work; stop seeking outside money on non-transparent terms; and end the threats to Bosnia’s territorial integrity.

This will not be easy.  It means accepting that change comes step-by-step, recognizing that the perfect should not be the enemy of the good, and compromising.  Ideally, local politicians could agree on this approach and produce results soon.  Time is passing quickly.

 

OPPORTUNITIES

This brings me back to the opportunities for BiH today.  The decisions taken by NATO heads of state at the 2022 Madrid Summit provide BiH with an opportunity to build a much deeper relationship with NATO.

And the EU offer is real.  Access to the Single Market can mean immediate economic gains.  Countries that have entered the Single Market this century have seen incomes triple since their entry.  Eventually BiH can also join the EU and get access to the support provided.  By one measurement, the average amount the EU sends to member states is approximately 4,000 Euros per citizen: for the western Balkans now it’s 123 per citizen.

Since 1995, the United States has invested a tremendous amount of human and monetary capital in BiH to strengthen its institutions and to defend it from any actors – internal or external – who would seek to divide or destroy it.  BiH citizens can count on the United States to remain committed to our partnership with Bosnia and Herzegovina, whether confronting political instability within BiH or the acute threat of malign actors from outside BiH.

Before I close, I would like to point out again how lucky we all are to have Ambassador Michael Murphy at the helm at U.S. Embassy Sarajevo.  I am grateful for his tireless work, deep understanding of the country, and dedication to enhancing the country’s stability and security as well as to advancing BiH on its Euro-Atlantic path.  He demonstrates the United States’ commitment to Bosnia and Herzegovina every day.  From where I sit, he is doing an excellent job advancing U.S. policy and supporting BiH as it seeks to navigate some of the greatest challenges the country has faced since the 1992-1995 war and the complicated geopolitical moment we are facing today.

The United States is committed to BiH.  Leaders here need to come together around compromise, a rejection of corruption, and an end to ethno-nationalism.  They need to work for the benefit of the citizens of this country.  None of this is easy or quick, but I do believe that BiH can give all its citizens a better, safer, and more prosperous life.