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Donors community sets conditions for future financial aid to Bosnia

SARAJEVO, May 29, 2000 -- (AFP) Bosnia is on notice that further financial aid from the international community will depend on the country carrying out economic and political reforms.

This was the message which emerged from Brussels this week when donor countries reviewed their aid to Bosnia which has already received five billion dollars from them.

Major donor countries said that economic reform, the return of refugees and the functioning of state institutions were Bosnia's top priorities in the future, adding that fulfillment of these provisions "will be reflected in the strategy and programming of the donor community."

Some 5.1 billion dollars have been pledged at five donor conferences for Bosnia since the end of the 1992-95 war, but the country's economy still remains dependent on foreign aid.

A declaration by participants at the two-day Brussels meeting, urged the country's leadership to carry out economic reform aimed at "creating the conditions for self-sustaining market-driven economic growth to avoid an economic crisis as Bosnia makes the transition from a donor dependent economy."

The declaration said that this year marked the end of the large-scale, post-war reconstruction period for Bosnia, that was one of the "most highly assisted countries in the world."

The international community's top mediator in Bosnia, Wolfgang Petritsch, said that that if needed reforms were not carried out the country might face "economic catastrophe."

The donors called for creation of a single economic space to encourage private sector growth, privatization and a crackdown on corruption.

They also urged Petritsch to use all his powers to "remove obstacles that choke economic growth and deprive citizens of jobs and fruitful economic life."

Petritsch, who has the power to remove elected officials and impose laws, said Bosnia should focus on attracting more foreign investment rather than on getting more international aid.

Another priority was the return of more than one million refugees.

The Dayton peace accords that ended the war left the country divided between two entities -- Serbs' Republika Srpska and the Muslim-Croat Federation, with weak common institutions.

The functioning of joint institutios was a priority for Bosnia's integration with Euro-Atlantiuc institutions.

Donor countries expressed dissatisfaction with the slow pace of peace implementation since their last meeting in Madrid 1998, and said "the responsibility ... lies squarely with the obstructionist political parties and their allies, both within and outside Bosnia-Hercegovina."

"Narrow nationalistic and sectarian political interests have impeded everything from refugee returns to economic reform, to the functioning of government institutions," their declaration added.

"The international community is fed up with the slow progress. As a result donors funds are rapidly declining," Petritsch's spokeswoman Alexandra Stiglmayer said.

The declaration urged Bosnia-Hercegovina citizens to "take the ownership of their future" and insist on transparency and accountability of elected officials ahead of the November 11 general elections.



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