Bosnia and Herzegovina: Current Issues and U.S. Policy
Released: 2013-01-24T00:00:00

Background

Before the breakup of Yugoslavia in 1991, Bosnia and Herzegovina (sometimes referred to informally as Bosnia) was one of Yugoslavia's six republics. It had an ethnically mixed population. The rise of hardline nationalism in Serbia under Slobodan Milosevic and a similar movement in Croatia led by Franjo Tudjman in the late 1980s and early 1990s posed a grave threat to Bosnia-Herzegovina's unity. Bosnia's own republic government was split among Bosniak (Slavic Muslim), Croat, and Serb nationalists. The secession of Slovenia and Croatia in June 1991 upset the delicate balance of power within Yugoslavia. Milosevic conceded Slovenia's independence after a few days, but Croatia's secession touched off a conflict between Croat forces and Serb irregulars supported by the Serb-dominated Yugoslav Army. Bosnian Serb nationalists demanded that Bosnia remain part of a Serbian-dominated Yugoslavia. Bosnian Croat nationalists threatened to secede if Bosnia remained in Yugoslavia.

Bosnian President Alija Izetbegovic, a Bosniak, worried about the possible spread of the conflict to Bosnia and tried to find a compromise solution. However, these efforts were made very difficult by the Milosevic and Tudjman regimes, both of which had designs on Bosnian territory. In addition, Izetbegovic's hand was forced by the European Community (EC) decision in December 1991 to grant diplomatic recognition to any of the former Yugoslav republics that requested it, provided that the republics held a referendum on independence and agreed to respect minority rights, the borders of neighboring republics, and other conditions. Izetbegovic and other Bosniaks felt they could not remain in a Milosevic-dominated rump Yugoslavia and had to seek independence and EC recognition, even given the grave threat such a move posed to peace in the republic. Bosnian Serb leaders warned that international recognition of Bosnia-Herzegovina would lead to civil war.

In March 1992, most Bosniaks and Croats voted for independence in a referendum, while most Serbs boycotted the vote. In April 1992, shortly before recognition of Bosnia by the European Community and the United States, Serbian paramilitary forces and the Yugoslav Army launched attacks throughout the republic. They quickly seized more than two-thirds of the republic's territory and besieged the capital of Sarajevo. More than 96,000 people were killed in the war. Approximately 2.3 million people were driven from their homes, creating the greatest flow of refugees in Europe since World War II. Serbian forces attacked Bosniak and Croat civilians in order to drive them from ethnically mixed areas that they wanted to claim. Croats and Bosniaks were initially allied against the Serbs, but fighting between Croats and Bosniaks broke out in ethnically mixed areas in 1993-1994, resulting in "ethnic cleansing" by both sides. Bosniak forces also engaged in ethnic cleansing against Serbs in some areas. In addition to the inter-ethnic bitterness it created and the damage it caused to Bosnia's economy, the war also greatly strengthened organized crime groups and their links with government officials, an important stumbling block to Bosnia's postwar recovery.

The war came to an end in 1995, after NATO conducted a series of air strikes against Bosnian Serb positions in late August and early September. The strikes were in response to a Bosnian Serb refusal to withdraw its artillery from around Sarajevo after an artillery attack on a Sarajevo marketplace caused many civilian deaths. Bosniak and Bosnian Croat forces, now better equipped and trained than ever before, simultaneously launched an offensive against reeling Bosnian Serb forces, inflicting sharp defeats on them. The Bosnian Serbs agreed to a cease-fire in October 1995.

Serbian President Slobodan Milosevic, Croatian President Franjo Tudjman, and Bosnian President Alija Izetbegovic, as well as representatives of the Bosnian Serbs and Croats, met at the Wright-Patterson Air Force base in Dayton, OH, in November 1995 to negotiate a peace agreement mediated by the United States, the EU, and Russia. On November 21, 1995, the presidents of Serbia-Montenegro, Croatia, and Bosnia-Herzegovina, as well as Bosniak, Croat, and Serb leaders in Bosnia, initialed a peace agreement. The final agreement was signed by the parties at a peace conference in Paris on December 14.

Under the Dayton Peace Accords, Bosnia-Herzegovina remains an internationally recognized state within its pre-war borders. Internally, it consists of two semi-autonomous "entities": the (largely Bosniak and Croat) Federation of Bosnia-Herzegovina and the (Bosnian Serb-dominated) Republika Srpska (RS). Under the accords, the Bosnian Federation received roughly 51% of the territory of Bosnia-Herzegovina, while the Republika Srpska received about 49%.

The multi-ethnic town of Brcko separates the RS into two parts and divides the western part of the RS from Serbia. This would make any effort to unite the RS with Serbia (a longstanding dream of Serbian nationalists) more difficult. Its strategic position made it a bone of contention. In a compromise move, it was not granted to either entity at Dayton, and was directly administered by the international community. It was later formally awarded to both entities jointly, while remaining a self-governing district.

Each of the entities has its own parliament and government with wide-ranging powers. Each entity may establish "special parallel relationships with neighboring states consistent with the sovereignty and territorial integrity" of Bosnia-Herzegovina. Most powers are vested in the entities; the central government has responsibility for foreign policy, foreign trade and customs policy, monetary policy, and a few other areas. Decisions of the central government and parliament are nominally taken by a majority, but any of the three main ethnic groups can block a decision if it views it as against its vital interests. The Federation is further divided into 10 cantons, each of which has control of policy in areas such as policing and education.

A U.N.-appointed Office of the High Representative (OHR), created by the Dayton accords, oversees civilian peace implementation efforts. The High Representative is supported by the Peace Implementation Council (PIC), a broad umbrella group of 55 countries and agencies. As the PIC's size and composition makes it unwieldy for decision-making, the PIC provides ongoing political guidance to OHR mostly through a Steering Board composed of key countries and institutions, including the United States, Russia, France, Germany, Britain, Italy, Canada, Japan, Turkey, and the EU Commission and Presidency.

At a December 1997 PIC conference in Bonn, Germany, the international community granted the High Representative powers (known as the "Bonn powers") to fire and take other actions against local leaders and parties as well as to impose legislation in order to implement the peace agreement and more generally bring unity and reform to Bosnia. The High Representative also holds the post of the European Union's Special Representative in Bosnia. A peacekeeping force, at first NATO-led, but led by the EU since 2004, implements the military aspects of the accord.

Since 1997, the United States and other Western countries have pressed local leaders in Bosnia to build the effectiveness and governing capacity of the Bosnian central government. The United States and the EU have maintained that the Dayton institutions have proved to be too cumbersome to provide for the country's long-term stability, prosperity, and ability to integrate into Euro-Atlantic institutions. Some successes have been scored in this area, including merging the armed forces and intelligence services of the two entities, and creating central government institutions such as border and customs services, and a state prosecutors' office and ministry of justice. However, even these achievements have required pressure on local leaders or even direct imposition of changes by the High Representative. International efforts have had the support of Bosniak politicians, but usually have faced strong resistance from Serbian ones, as well as from some Croat leaders.

The state consolidation process suffered a serious setback in April 2006, from which it has not recovered. A constitutional reform package pushed by the United States and EU was defeated in the Bosnian parliament by a narrow margin. The relatively modest proposal would have replaced the three-member collective central government presidency with a single presidency, increased the powers of the prime minister, and strengthened the central Bosnian parliament. The electoral campaign in the run-up to Bosnia's October 2006 general elections was notable for its nationalist tone, making reform efforts more difficult. Bosnian leaders made an effort to restart constitutional reform in late 2008 and early 2009, but it did not produce an agreement.

Another round of constitutional reform talks, brokered by the United States and the European Union, took place in October and November 2009 at the Bosnian army base at Butmir, near the capital, Sarajevo. No agreement was reached at these talks, either. After the failure of the Butmir talks, constitutional reform remained on the back burner as campaigning got underway for Bosnia's October 2010 general elections.

Current Situation

Political Situation

In February 2012, Bosnian leaders formed a new Bosnian central government, 16 months after the country's October 2010 elections. The chairman of the Council of Ministers is Vjekoslav Bevanda. This very lengthy political stalemate was due to the insistence by two leading Croat parties, the HDZ and HDZ 1990, that only a person nominated by them, as the largest Croat parties in Bosnia, should be chairman of the Council of Ministers.

The new government's period of relative effectiveness was short-lived. The country was plunged into a new round of political squabbling in May 2012, this time between two largely Bosniak parties. The Party of Democratic Action (SDA), a key Bosniak party in the government, voted against the government's budget, provoking the ire of the largest party in the government, the nominally multi-ethnic but largely Bosniak Social Democratic Party (SDP). In November 2012, after months of maneuvering and horse-trading, the SDP succeeded in convincing the main Croat parties and the leading Serb party, the Alliance of Independent Social Democrats (SNSD) to dump the SDA. Critics charged that in exchange for the move, the SDP agreed to SNSD demands to weaken central government institutions and the independence of the judiciary. The SDA was replaced in the central government by another Bosniak party, the Alliance for a Better Bosnia, which is headed by a controversial business tycoon.

These political squabbles have seriously detracted from Bosnia's ability to engage in reforms needed to boost its economy and move closer to the EU. While the conflicting ambitions of party leaders is an important factor in this failure, it should be noted that in any case a parliamentary majority in the Bosnian political system has less significance than in other systems, as representatives of an ethnic group, even if in a minority, can veto any decision that they feel does not accord with their interests. This means in effect that all major decisions have to be made by consensus among the main ethnic parties, which is often very difficult since they have fundamentally different views on Bosnia's future.

Perhaps the biggest single problem is the lack of support in the Republika Srpska for a more effective central government. Indeed, some observers believe that RS President Milorad Dodik's strategy has been to obstruct the functioning of Bosnian institutions so much that the Bosniaks, Croats, and the international community will eventually agree to let the Republika Srpska become independent. Dodik has repeatedly said that Bosnia was being kept alive artificially by foreigners, and that alternatives such as peaceful dissolution of the country should be discussed. Dodik has also expressed support for the partition of Kosovo, perhaps seeing it as a model for Bosnia.

Some observers have claimed that Dodik's position in the RS may be eroding, given such factors as the defeat his SNSD party suffered in local elections in 2012, factionalism within his party, a deteriorating economic situation that has led to protests and strikes, and corruption investigations in neighboring Serbia that could implicate Dodik and others in Bosnia. However, it should be noted that while a new RS leadership might have a less confrontational style than Dodik, RS positions on key issues would not likely change, as they are shared by most Bosnian Serbs. New elections are not scheduled until 2014. In the meantime, Dodik has stepped up his nationalistic, anti-EU, anti-US rhetoric, as he has in the past when he appeared to have felt threatened.

The other entity within Bosnia, the Federation, has also been plagued with political divisions. In March 2011, the Federation parliament approved a new Federation government, led by the SDP. It included small Croatian parties, but not the HDZ and the HDZ 1990. These two parties claimed the government was formed illegally. They asked the Central Election Commission (CEC) for a ruling on the issue. The commission ruled that the government was illegal, but the High Representative annulled the decision of the CEC, allowing the new government to continue working. In addition to concerns about its legality, the HDZ and HDZ 1990 did not see the government as legitimate. They claimed it did not represent Croat interests, since they, having received the most Croat votes in the election, are not participants.

This "problem" may be solved as a result of the November 2012 reshuffle of the central government. As part of the deal, the SDP agreed to reshuffle the Federation government to include the HDZ and HDZ 1990 and oust the smaller Croat parties. However, Federation President Zivko Budimir has refused to dismiss ministers from these parties, as he is a member of one of them. In return, the new majority called on Budimir to resign.

As in the case of the central government, these political intrigues in the Federation are but a symptom of more fundamental, structural problems. The complicated division of powers and bureaucratic overlap between the Federation government and the 10 canton governments within the Federation has created a dysfunctional situation that has hindered the Federation's economic development and threatens the fiscal collapse of Bosnia as a whole. A report by the International Crisis Group suggested that constitutional reform at the Federation level would not only improve the dire situation in the Federation itself, but provide momentum for reform at the central government level.

However, Croat leaders are suspicious of efforts to streamline the Federation, fearing they could result in greater power for the more numerous Bosniaks. Indeed, some Bosnian Croats have called for a third, Croat, entity to be carved out of Bosnia to ensure their rights. The international community has opposed the idea, viewing it as likely to result in an even less effective Bosnian governmental system.

Opinion polls in Bosnia have shown a broad-based disgust with the Bosnian political class, due in part to the petty squabbling of the kind noted above over government posts (and the privileges and opportunities for corruption that come with them), while the country continues to suffer serious problems with unemployment and poverty. For example, in a poll done for the National Democratic Institute in 2010, 87% of the citizens said the country was moving in the wrong direction, with only 12% saying their lives had improved in the past four years. Yet the October 2010 elections resulted in many of the same ethnically based parties and leaders being returned to power, and no viable non-nationalist alternative taking hold. This paradox is explained by some observers by the nature of the Dayton system and the election laws, which favor ethnically-based politics. Other experts also point to reflexive distrust of the other ethnic groups, a lingering effect of the war.

Economic Situation

Bosnia's economic growth has been hampered by Bosnia's cumbersome governing structure, excessively large and expensive government bureaucracies, and long-standing problems with organized crime and corruption. Bosnia's public sector amounts to nearly 50% of the country's GDP. The Federation has also been plagued by infighting among politicians that has delayed some privatization projects and driven away foreign investors. Dodik's hegemony has simplified matters in the RS, while at the same time allegedly fostering high-level corruption.

Nevertheless, despite these problems, living standards improved in Bosnia before the global economic crisis; real wages increased by 44% between 2000 and 2007. Real GDP increased by 30% in the same period. The global economic crisis caused a drop in real GDP of 3.1% in 2009. Since then, Bosnia's economy has stagnated. Real GDP rose by 0.7% in 2010 and 1.3% in 2011. The Economist Intelligence Unit estimates Bosnia fell back into recession in 2012, with GDP shrinking by 0.5%. This double-dip recession, due to the effects of the Eurozone crisis, has had a negative impact on trade, remittances from Bosnians working abroad, and foreign investment.

In this climate, budget deficits have increased and tax receipts have declined. In order to secure funding from the International Monetary Fund (IMF), both the Federation and the Republika Srpska have been forced to make highly unpopular cuts in veterans' benefits and government salaries (including those of teachers) in order to bring the budget deficit in line with the IMF-mandated target of 3%. In December 2012, the IMF released a second tranche of a two-year, $522 million stand-by loan in recognition of Bosnia's fiscal consolidation efforts.

However, austerity may be exacerbating long-standing social problems. Living standards remain low for many Bosnians and unemployment remains a severe problem. According to the European Commission's October 2012 report on Bosnia's progress toward EU membership, unemployment in Bosnia was 28% in 2011, while youth unemployment was 57.9%

International Role in Bosnia

There has been a debate about the future role of the international community in Bosnia. The Peace Implementation Council (PIC) has appeared eager to end the direct international oversight of Bosnia through the OHR. This may partly be due to "political fatigue" after having played such a prominent role in the country for so long. Since 2007, the High Representative has been reluctant to use his wide-ranging Bonn powers to impose legislation and fire obstructionist officials, due to a lack of political support for such actions by leading countries in the PIC. Indeed, in 2012, the Bonn powers were used only to lift restrictions on persons previously sanctioned by the OHR. Since 2009, Valentin Inzko, formerly Austria's ambassador to Slovenia, has been the High Representative.

The international community's desire to move away from direct oversight may be designed to encourage Bosnian leaders to take greater responsibility for their country. Direct international tutelage will have to be eliminated if the country is to join NATO and the EU, the members of which are all fully sovereign states. The PIC has agreed to close OHR after five objectives have been met. These include a decision on ownership of state property; a decision on defense property; implementing the Brcko Final Award (which made the town of Brcko a self-governing unit within Bosnia); ensuring fiscal sustainability; and entrenching the rule of law. The PIC and OHR have demanded specific action and legislation from the central and entity levels to meet these objectives. Two additional conditions were also set: the signing of a Stabilization and Association Agreement with the EU (already accomplished) and a positive assessment of the situation in Bosnia by the PIC.

In March 2011, the EU decided to establish "a reinforced, single EU Representative in Bosnia and Herzegovina who will take a lead in supporting the country" on its path towards EU integration. Peter Sorensen from Denmark was chosen for this post in May 2011. The move appeared to be part of some countries' efforts to try to consolidate and strengthen the role of the EU in Bosnia and limit that of the OHR. The March 2011 EU Council decision that announced the reinforcement of the EU Delegation in Bosnia also suggested that OHR could be reduced in size and relocated outside of the country. This suggestion has been repeated in EU Council documents since then, most recently in December 2012. In August 2012, the OHR office in the strategic Brcko district was effectively closed, allegedly due to progress in reforms, but reportedly also because the EU was eager to reduce the role of OHR and expand its own presence there.

In June 2011, OHR lifted almost all the bans from holding office that previous High Representatives had imposed on Bosnian politicians for violations of the Dayton Peace Accords. Many observers in and outside of Bosnia believe that OHR retains little credibility in Bosnia, and therefore should be eliminated in the near future. On the other hand, some countries, including the United States, do not want to eliminate OHR before the objectives and conditions are met, perhaps for fear of suffering a blow to their own credibility.

The EU has added a possible means of persuasion for EU officials faced with intransigence by Bosnian leaders. In March 2011, the EU Council approved a decision on imposing a ban on travel to EU countries and asset freezes on persons whose actions threaten Bosnia's sovereignty and territorial integrity, threaten the security situation in Bosnia, or undermine the Dayton Peace Accords. The Council would decide to put a person on the list based on the recommendation of a member state or that of the EU foreign policy chief.

The EU-led peacekeeping force in Bosnia, dubbed EUFOR Althea, has about 600 troops. Its mission is to assist Bosnian defense reform efforts, as well as helping to ensure a safe and secure environment in Bosnia. Some two dozen EU and non-EU countries contribute to the force, but the core of the contingent is supplied by Austria, Hungary, and Turkey. An "over-the-horizon" capability is available to bolster EUFOR in case of a crisis.

Possible NATO and EU Membership for Bosnia

As direct control has declined, the international community encourages reform in Bosnia by providing aid, advice, and the eventual prospect of joining NATO and the EU. In November 2006, NATO leaders invited Bosnia to join its Partnership for Peace (PFP) program, which provides Bosnia with assistance in improving its armed forces and making them interoperable with NATO. At their April 2008 summit in Bucharest, the allies agreed to upgrade their relationship with Bosnia by launching an "Intensified Dialogue."

In April 2010, NATO foreign ministers agreed to permit Bosnia to join the Membership Action Plan (MAP) program, a key stepping-stone to membership for NATO aspirants. However, the ministers stressed that NATO will not accept Bosnia's Annual National Plan under the program until the entities agree to the registration of defense installations as the property of the central government. The main parties in Bosnia have reached an agreement on the principles for such a division, but have not implemented the decision. The main stumbling block is Dodik's refusal to allow the registration of military installations on RS territory as central government property, presumably because such a move could strengthen central government institutions.

As part of its effort to receive a MAP, the Bosnian presidency agreed in April 2010 to send a peacekeeping contingent to the NATO-led International Security Assistance Force (ISAF) in Afghanistan. Bosnia currently has 53 troops in ISAF. Bosnia participates in a team of about 40 persons, which also includes members from Albania, Croatia, Macedonia, Montenegro, and Slovenia, to train Afghan military police.

Despite these efforts, the Republika Srpska's dedication to NATO membership is highly questionable. In 2012, Dodik renounced his earlier support for joining NATO, and has advocated the demilitarization of Bosnia, which would be incompatible with NATO membership. Moreover, as he and other Bosnian Serb leaders point out, NATO membership enjoys very low public support in the Republika Srpska, according to opinion polls. Bosnia has not formally withdrawn from the MAP process, however.

In 2008, Bosnia signed a Stabilization and Association Agreement (SAA) with the European Union, a steppingstone to an EU membership candidacy. However, the agreement has not entered into force due to Bosnia's failure to meet conditions set by the EU. For 2013, the EU has budgeted 111.8 million Euro (just under $150 million) in aid for Bosnia for political and economic reform under the Instrument for Pre-Accession Assistance (IPA). The aid provides support for the rule of law, promoting economic growth, and for public administration reform. The EU is discussing the amount to be allocated for the IPA program as a whole for the period 2014-2020. No decision has been reached yet, but given the EU's financial difficulties, funding may be at least slightly reduced in real terms when compared to the 2007-2013 period.

The EU has set several conditions for Bosnia to become a credible membership candidate. The EU demanded that Bosnia adopt a law on state aid at the central government level to prohibit government aid that would distort foreign trade. Bosnia was required to adopt a law on holding a new census. The EU wanted to see Bosnia amend its constitution to comply with the ruling of the European Court of Human Rights on the Sejdic-Finci case, which said that the constitution's reservation of some political offices (the three-person collective presidency and seats in the House of Peoples, the upper house of the central Bosnian parliament for members of a specific ethnic group contravenes the European Convention on Human Rights. The EU also insisted that Bosnia's many levels of government establish an effective coordinating mechanism for cooperation with the EU.

Bosnia met two of these three criteria in February 2012. The Bosnian parliament approved a census law and a state aid law. Little progress has been made on the Sejdic-Finci issue, however. In any case, if an agreement between the main ethnic parties is reached, it will likely be a mere technical fix, not one that will genuinely open the way to a less ethnically-based political system. To comply with the ECHR, the solution will have to omit specific references to ethnic groups, but will likely substitute a more indirect method that will nevertheless ensure that each major ethnic group will get same quota of offices as before. The Croat parties are particularly insistent on this point, as they are by far the smallest of the three main ethnic groups in Bosnia.

Although it has called for Bosnia to solve the Sejdic-Finci problem and develop an effective coordination mechanism among its levels of government, the EU has not made deeper constitutional reforms to improve the effectiveness of Bosnia's governing institutions a condition for EU membership candidacy. However, EU officials say changes may be required during the accession process in order for the country to conform to EU standards. The EU may be leery of putting forward specific details for constitutional reform at this stage, fearing that to do so may cause Dodik and the RS to scuttle the whole EU integration process before it starts.

In its October 2012 report on Bosnia's progress toward EU membership, the European Commission was critical of Bosnia's performance, noting "limited progress," or "little progress," or even "very little progress" in almost all reform areas. While expressing disappointment with these shortfalls in its December 2012 conclusions on enlargement, the EU Council promised continued support for Bosnia's EU membership aspirations.

U.S. Policy

The United States has strongly supported Bosnia's integration into Euro-Atlantic institutions. However, the U.S. role in the country has declined in recent years. There have been no U.S. peacekeeping troops in Bosnia since 2004, when a NATO-led peacekeeping force was replaced by the current EU-led force. Many observers have claimed that the U.S. political role in Bosnia has also declined, particularly since the failure of constitutional reforms in 2006, despite strong U.S. pressure on the Bosnian parties at the time. The Obama Administration has touted the close working relationship it has maintained with the EU on Bosnia as a key success of its policy.

The United States has provided large amounts of aid to Bosnia. According to the USAID "Greenbook," the United States provided just under $2 billion in aid to Bosnia between FY1993 and FY2010. Aid levels were high in the years immediately after the 1992-1995 war, when the country was rebuilding. Aid totals gradually declined thereafter, and current U.S. aid to Bosnia is relatively modest.

U.S. aid to Bosnia has continued to decline in recent years, but less sharply than U.S. aid to other countries in the region. In FY2011, Bosnia received $42 million in aid for political and economic reforms; $4.491 million in Foreign Military Financing (FMF); $0.986 million in IMET military training funds; and $1.25 million in the Nonproliferation, Antiterrorism, Demining, and Related (NADR) account. In FY2012, Bosnia was slated to receive an estimated $39 million in assistance to promote political and economic reform, $4.5 million in FMF, $1 million in IMET assistance, and $5.25 million in NADR aid. For FY2013, the Administration has requested $28.556 million in aid for political and economic reforms from the Economic Support Fund account, $6.735 million in the International Narcotics Control and Law Enforcement account (INCLE), $4.5 million in FMF, $1 million in IMET aid, and $4.75 million in NADR funding.

According to the FY2012 Congressional Budget Justification for Foreign Operations, U.S. aid has focused on strengthening state-level institutions in Bosnia. The United States provides assistance to Bosnia's state-level police organizations to fight organized crime and terrorism. U.S. aid also is aimed at improving the functioning of Bosnia's judiciary; improving its border controls; and creating a better legal and regulatory environment for economic growth and investment. The objective of U.S. military aid is to unify Bosnia's military more effectively and improve its capabilities so that it may become interoperable with NATO.

Vice President Joseph Biden set the tone for the Obama Administration's policy toward Bosnia during a visit to the region in May 2009. In a speech to the Bosnian parliament he warned that the "sharp and dangerous rise in nationalist rhetoric" that has occurred in Bosnia since 2006 must stop. He warned that Bosnia faced a future of poverty and possibly even violence if it did not abandon this path. Biden appeared to tacitly underscore continued U.S. support for the framework of the Dayton Peace Accords by saying Bosnia could integrate into Euro-Atlantic institutions as a state "with two vibrant entities." However, he said that Bosnia needed a functioning central government that controls the national army, prevails where there is a conflict between central and local laws, has an electoral system that does not exclude any group, has the power to raise revenue, and has the authority to negotiate with the EU and other states to implement its obligations. Biden warned that the United States would not support the closure of OHR until the five objectives and two conditions were met.

Since the failure of the Butmir talks in 2009, U.S. policymakers have disavowed any intention to lead an effort to scrap or even revise the Dayton Accords and the Bosnian constitution, saying that any such efforts must come from the Bosnians themselves. However, press sources in the region claim that the United States has been working behind the scenes to promote talks among local leaders on reforming the Federation to make it function more efficiently, including by reducing the number of cantons.

Secretary of State Hillary Clinton visited the region from October 29 to November 2, 2012, stopping in Bosnia, Serbia, Kosovo, Croatia, and Albania. In a move that underlines the U.S. focus on coordination with the EU, she visited Bosnia, Serbia, and Kosovo jointly with EU foreign policy chief Baroness Catherine Ashton.

In Bosnia, Clinton stressed that the United States and the EU share the same goals in Bosnia – to see the country become a stable, prosperous, multiethnic democracy integrated into Euro-Atlantic organizations. She said the United States was "frustrated" by the lack of leadership shown by politicians in Bosnia toward these goals. She said that it was "totally unacceptable" that some leaders in Bosnia continued to question Bosnia's territorial integrity and sovereignty. She warned that Bosnia risked being left behind as its neighbors moved forward in their integration with the EU. Clinton said the United States would push for Bosnia's participation in NATO's Membership Action Plan program, if Bosnian leaders resolved the issue of the division of military property.

Although Bosnia has not been considered a hot spot in the global war on terror, given the pro-American attitudes of most Bosnian Muslims, the existence of at least some threat of Islamic extremism and terrorism in Bosnia was underlined by an October 2011 attack on the U.S. Embassy in Sarajevo. Mevlid Jasarevic walked up to the embassy building with an AK-47 assault rifle and began firing at the building. He continued shooting for about a half-hour before being shot by police and arrested. No Americans were hurt, but Jasarevic wounded one Bosnian policeman. Bosnian police raided several villages in central Bosnia where Jasarevic and other Islamic fundamentalists were known to reside. The Bosnian police arrested two men who drove Jasarevic to Sarajevo from central Bosnia. Serbian police questioned several persons in Novi Pazar, the capital of the Sandjak region of Serbia, where Jasarevic was raised, but made no arrests. The FBI assisted Bosnian authorities with the investigation. In December 2012, Jasarevic was convicted by a Bosnian court and sentenced to 18 years in prison. The two men accused of aiding Jasarevic were acquitted.

Policy Concerns

The international community has reduced its direct role in Bosnia, and holds out the timetable for its elimination as an incentive for the local parties in Bosnia to make progress on key issues. This is expected to work together with the other main incentive, Euro-Atlantic integration. However, it is unclear whether these incentives are strong enough for Bosnian leaders (particularly Dodik) to change their policies.

One important consideration is what policy objectives the international community realistically expects to achieve in Bosnia and its analysis of the consequences of failure. Avoiding widespread violence or even the breakup of Bosnia would presumably be the most basic international objective. Large-scale violence would put EUFOR in danger and require a U.S. and NATO military response, at a time when forces are severely stretched due to missions in Afghanistan and elsewhere. In addition, neighboring Serbia and Croatia could be pulled into such a conflict. This could also implicate NATO, as Croatia is a member of the Alliance. Increased regional instability could also revive conflict between Serbs and Albanians in Kosovo.

Those who argue that a renewed conflict is unlikely note that the political environment around Bosnia now is completely different than it was during the 1990s. Then, nationalist regimes in Serbia and Croatia tried to cement their support at home by expanding their countries' borders at Bosnia's expense. Now, governments in these countries appeal to their electorates by trying to build prosperous democracies integrated with Europe. This goal would be shattered by renewed war. Bosnia's army is also much smaller now than during the war, with fewer heavy weapons. Some observers assert that police forces, private security companies, and a well-armed population could in principle provide forces for substantial levels of violence. Public opinion polls indicate very little support for violence in support of nationalist causes. Most Bosnians appear more concerned about high unemployment and low living standards.

Renewed conflict (if perhaps on a smaller and more localized scale than in the 1990s) would be most likely to occur if the RS attempted to secede from Bosnia and Herzegovina, and Bosniaks tried to prevent such an action by force of arms. Observers are divided on whether the current impasse, caused in part by RS obstructionism, could eventually destabilize the country even without a provocative act such as secession. If the United States and other international actors conclude that such a nightmare scenario is unlikely to unfold, they may continue to follow their current approach, even if it does not bear fruit in the short term, in part due to a lack of alternatives and in part due to their focus on more pressing international issues.

The international community has not considered trying to broker a peaceful breakup of Bosnia. This is despite the possibility that Bosnia's shortcomings as a state may not be primarily due to the inherent flaws of the Dayton accords, the alleged lack of skill of international overseers, or the foibles of Bosnian politicians. Instead, it can be argued that many of the failures ultimately stem from a more fundamental problem—the fact that at least a large minority of the population (Bosnian Serbs and many Croats) never wanted to be part of an independent Bosnia. International rejection of partition is in part due to strong opposition by the Bosniaks, who would have the most to lose in such an arrangement. A mainly Bosniak Bosnia would be a small, landlocked country surrounded by less than sympathetic neighbors. In contrast, Bosnian Serb and Croat nationalists would hope for support from and eventual union of territories they control with Serbia and Croatia respectively.

The United States and other Western countries may feel that they owe the Bosniaks a lingering moral debt, due to the perceived indecision and tardiness of the international community in averting or ending the 1992-1995 war, in which the Bosniaks were the main victims. Perhaps at least equally importantly, there are concerns that a partition of Bosnia could be destabilizing for the region as a whole, given that Kosovo and Macedonia have ethno-territorial problems of their own. Leaders in the Balkans often look to the example of others in the region as justification for their own positions and actions.

The international community's more ambitious goals include encouraging political and economic reforms in order to bring Bosnia into NATO and the EU. Bosnia's deep-rooted structural problems may prevent rapid success in these areas in the near future, unless NATO and the EU decide to advance Bosnia's candidacies even in the absence of marked improvement, in hopes such moves themselves would help stabilize the country.