As Prepared for Delivery
Ladies and Gentlemen, Honored guests, Distinguished Colleagues,
Dobro Jutro and Good morning!
I am very honored to be here today to open this conference and celebrate the 20th anniversary of the signing of the Dayton Peace Accords, technically known as the General Framework Agreement for Peace in Bosnia and Herzegovina. I highlight the agreement’s title to point to its essential component: it was an agreement on a framework that would bring lasting peace to war-torn Bosnia and Herzegovina and guide its transition to a modern democracy. I also use the word celebrate—in spite of the relentless debates this year about the Accord’s success or failure — because I truly believe that we all need to acknowledge the effect this agreement had. It ended a brutal war, established peace in Bosnia and Herzegovina, and provided a sense of security and normality for Bosnia and Herzegovina’s people. It has allowed for significant progress over the last 20 years, but also for significant challenges.
As I have attended a series of Dayton events this year, it’s clear that there are a range of perspectives on these issues. As we open this anniversary week and this important conference, I think this morning it’s worthwhile to review what this accord achieved and to lay out the challenges that still lie ahead. My goal in these remarks this morning will be to set the framework for the many important discussions that will follow over the next two days.
Let’s look at what Dayton is and isn’t.Dayton is first and foremost a peace agreement that established a framework for people to begin rebuilding their lives out of the rubble of war. In the period 1992 – 1995, approximately 2.2 million people fled their homes, representing more than half of the country’s prewar population. As of today, more than one million people have returned, with over half of those returning to their pre-war homes, many now living as an ethnic minority in those communities. Even more impressive is Bosnia’s 99 percent rate of implementation of property rights: over 220,000 occupied homes have been returned to their pre-war owners.
Twenty years ago it would have been almost impossible to imagine the successes that have followed. Many steps that furthered the sense of a shared country and shared vision have been implemented since the end of the war, whether they arose directly out of the Accords itself, through decisions of the OHR that were subsequently verified by the courts or parliament, or through laws passed based on Dayton structures. Things that today seem normal, at the time were radical and groundbreaking.
The creation of the Central Bank of Bosnia and Herzegovina in 1997 and the agreement to issue a single currency as legal tender throughout BiH, was a tangible and visible symbol of a shared country. Prior to the implementation of this component of Dayton, multiple currencies were used, including the Serbian dinar, the Croatian kuna, and the Deutsche mark. These currencies were circulated by quasi-central banks operating in each ethnicity’s majority areas which made trade within and outside of Bosnia and Herzegovina difficult. The introduction of the convertible mark and the subsequent rise in public acceptance and confidence in the system demonstrated that there was shared interest in making Bosnia and Herzegovina a functional, successful country.
Uniform license plates, issued in 1998 following a decision by the High Representative, are another example. The implementation of the decision ensured that license plates which identified the driver’s geographic origin did not become a proxy for identifying the driver’s ethnicity, ensuring true freedom of movement.
The creation of the Indirect Taxation Authority is another example of a significant success. It enabled the smooth implementation of the national VAT in January 2006 and oversees national customs collection at 40 road and four airport border crossings, all steps contributing to reliable financing of state and entity budgets.
In 2003, the adoption of the Law on Defense formally began the process that put an end to the fragmented military structure of the country. The Defense Law unified the entities’ armies and brought together Serb, Croat, and Bosniak soldiers under a single chain of command. The Armed Forces of BiH are now contributing highly respected forces to peacekeeping operations around the world, and this December, will mark their 10th anniversary as a unified force.
The successful integration of Bosnia and Herzegovina’s intelligence services, through the creation of the Intelligence and Security Agency, OSA, in April 2004 is another success. Prior to its integration, the entities maintained separate intel services that served the interests of certain ethnic political leaders and groups. OSA today is a professional intelligence service with full civilian control and parliamentary oversight. It serves as another testament that functional multi-ethnic structures are possible in Bosnia and Herzegovina.
And this year, BiH has productively chaired both the Council of Europe and the Adriatic 5, conducting both roles with success. In light of the terrible events in Paris this weekend, BiH’s progress in the fight against terrorism is especially important. The passage of the first Balkan foreign fighter law in June 2014, the subsequent arrests of a number of suspected foreign fighters, and five recent convictions, including the first major conviction under the law, are crucial steps as the world tackles this terrible challenge. Clearly, with political will, the Dayton Constitution can be used to make progress in BiH. But we all know that there is another side to this story.
Dayton as Impediment
In order to reach an agreement to end the terrible war in Bosnia-Herzegovina 20 years ago, it was necessary to draft an agreement that created structures emphasizing minority rights over the work of centralized institutions. Since then, certain politicians have attempted to hijack these Dayton structures to perpetuate their narrow ethnic and personal interests. Each day, citizens confront the destabilizing forces of self-interest, patronage, and extensive corruption. They also suffer from the complicated and expensive layers of government created under Dayton. But let’s be clear: while Dayton may be a complicated structure, corruption, patronage and self interest are not byproducts of Dayton. They are byproducts of the self-interested, self-promoting, and the corrupt within society. Too many politicians continue to play upon fears of insecurity to avoid transparency and accountability, putting personal advancement and profit ahead of progress for the people of Bosnia and Herzegovina. This is not the recipe for the future that the children of BiH deserve. Citizens urgently need to demand honest government from their leaders, holding them accountable for promises and the implementation of rule of law.
Bosnia and Herzegovina Today
As we look at Bosnia and Herzegovina today, several things stand out. Overall, long-time observers clearly point out that the country has been sliding backwards for much of the past decade. But this past year, we have see some signs of hope – let’s look at those first, and then at the many challenges that still lie ahead.
Since the signing of the Dayton Accords in November 1995, the Balkans has changed dramatically. Croatia has become a full-fledged member of both the EU and NATO, and Montenegro is on the path to join both institutions. Serbia has made commendable strides in normalizing relations with Kosovo, drawing closer to the EU, deepening its political dialogue and cooperation with NATO, having signed an IPAP earlier this year, and taking important steps toward reconciliation with BiH. The joint session of the governments of Bosnia and Herzegovina and Serbia in Sarajevo just a week ago, and the investment conference in Srebrenica last week attended by Serbian Prime Minister Vucic, would have been unimaginable in 1995.
Over the last 12 months, BiH has committed to a new European Union-led reform initiative, focusing on economic and social reforms. The Federation government has taken concrete steps to start moving reforms through the system, and all observers hope the Republika Srpska and the State-level government will begin implementing their reform plans straightaway. This initiative has the potential to be a game-changing program for BiH; but long-time observers all note that Bosnia and Herzegovina has long excelled at signing agreements, but all too often failed at implementation. The benefits that actual progress would bring are clear. Moody’s Investment Services, on October 30th, published a report underlining the potential of the reform process in Bosnia and Herzegovina. If reforms continue and the country engages with the IMF, Moody’s projects that BiH could reach three percent growth in 2016. This is a big deal. Bosnia and Herzegovina’s growth averaged .21 percent between 2009 and 2014, rose to 1.25 percent in 2014, and is projected to be 1.8 percent in 2015. Three percent would be a big step forward. 2015 has also seen significant progress toward activating Bosnia-Herzegovina’s Membership Action Plan (MAP) for NATO. The Tallinn conditions required the registration of properties identified by the Ministry of Defense as essential for their operations. Of the 63 identified, 20 have now been registered in the Federation. A final appeal decision in a RS registration case will determine in coming weeks whether properties can move forward in that entity as well, unlocking the condition for activation of MAP.
Looking at Bosnia-Herzegovina today, we see many positive steps, but also the terrible impediments that political and economic malfeasance have wrought. Corruption is a cancer eating at the heart of progress, preventing foreign investment in an economy where rule of law is too often ignored and where brave businesses who try to bring jobs to BiH face daily challenges to internationally-established business practices. 60% youth unemployment is driving the next generation to build their lives elsewhere; a divided, out-of-date education system is depriving the country’s children of the education they need to compete in the 21st century. Complicated political structures are used as an excuse for lack of progress, and as an opportunity to trade jobs for votes. And a lack of leadership has prevented the development of a shared vision for the future.
The Path Forward
Today, Bosnia-Herzegovina is standing at a crossroads. On the one side, we see a small number of politicians trying to move Bosnia-Herzegovina backward, reigniting ethnic tensions while ignoring both the urgent need for economic progress and the opportunity the reform agenda is offering to achieve that. This year we have seen the Referendum in the RS against the state court and OHR, as well as the RSNA recent decisions against the opposition serving at the State level, and other steps backward. But let’s be clear: no group has a monopoly on politicians working for their own gain. This challenge exists in all quarters, and if this political trend is allowed to win out, the future of BiH is indeed bleak. On the other side, there are tremendous possibilities. In five years, if politicians and citizens work together to root out corruption, implement true rule of law, improve the business climate, address changes to make governments at all levels more functional and effective, and make the reforms necessary to connect to European markets, Bosnia-Herzegovina’s economy could be thriving. As I have travelled around the country, I have seen clear evidence of its potential: in diaspora investors that return to open successful businesses, in small companies making highly competitive products for Europe, and in the country’s extraordinary natural resources and cultural heritage that attract a steadily increasing number of visitors from increasingly far corners of the world. Many of you will have seen the New York Times travel section cover story on Sarajevo last month, highlighting its tourist potential – another step unimaginable 20 years ago. But, these successes are only a shadow of Bosnia-Herzegovina’s promise. I see a country that in five years could be exporting fewer low value natural resources and more high value products, expanding its nascent technology sector that is starting to blossom in entrepreneurship hubs, attracting foreign investment from all quarters, and hosting tourists seeking to explore the country as a unique bridge between East and West.You have seen this too, and we must ask ourselves how we can work together for this Bosnia we can all imagine.
To get to this level of success, several key steps are needed. Above all, political will, citizen insistence on political accountability, and old-fashioned hard word are the key components that will move BiH forward. Political leaders need to demonstrate that they are ready to take the country in a new direction, and citizens must hold them to those promises. Today, I see five overarching areas that must be addressed to make Bosnia-Herzegovina the successful European nation it so deserves to be. These are:
Economic reform, an agenda that is underway through the EU reform initiative, but has a long way to go;
Political reform, to develop functional and efficient institutions that serve the citizens of BiH and free the economy from political interference, which may well require generation change in political leadership, which one party is admirably leading this year;
Education reform, to make schools a platform for reconciliation, not ethnic division, and prepare young people for the global economy;
Counter-corruption programs, including an independent prosecutor staff that can actually act against the multitude of cases that are discussed openly and publicly;
and last but far from least,
A shared vision for the future of the country, and the pride that comes with it.
The reopening this fall of the National Museum, a symbol of shared heritage and culture, after over two years of closure due to political and economic disputes, is one concrete example of how this sense of shared vision can be fostered. Watching the long lines of enthusiastic school children at the museum door every day provides a clear sense of the importance of this step. We also saw this sense of community and shared vision when neighbors of all ethnicities stepped up to help their fellow neighbors in the aftermath of the terrible flooding in May 2014. We saw glimmers of this when, as the regional media reported widely, the Serbian and Montenegrin teams were spotted chanting “Bosna, Bosna” as their under-16 Bosnian cadet basketball team peers won the European championship – and 50,000 people took to the streets to welcome them home to Sarajevo. We also saw this when BiH boxer Damir Beljo, an ethnic Croat draped in the Bosnian flag at an event in a predominantly Croat town, shut down some members of the audience who began to whistle at the playing of the Bosnian national anthem before his match.
It is clear that the people of BiH will achieve more by working together in this spirit of the common good than by fighting against one another. Much more importantly, I meet citizens in every corner of Bosnia-Herzegovina who tell me that is what they want, too. The progress made in the first decade after the war shows clearly that improvements are possible. To that end, the United States—which has demonstrated its profound commitment to BiH for over two decades—remains committed to support the people of BiH as they continue to work to build a stable, prosperous and successful country. We ask the leaders of Bosnia and Herzegovina to match us in this common goal and build on the foundation of Dayton to give the people of this country a chance for a stable and prosperous future.