Bosnia: cut in US aid would be disaster

SARAJEVO, Jul 11, 2000 -- (Reuters) Bosnian leaders and opposition politicians on Monday attacked as counterproductive a U.S. report's recommendation to suspend aid because of an alleged unwillingness to tackle corruption in the Balkan state.

While all sides were united in criticizing the recommendation, they disagreed over who was to blame for the corruption cited in the report issued on Friday by the General Accounting Office (GAO) of the U.S. Congress.

"The withdrawal of U.S. aid would punish the wrong people, and those are the citizens of Bosnia and Herzegovina," Haris Silajdzic, head of the Party for Bosnia-Herzegovina and former central government co-chairman told Reuters.

The GAO report said that the White House should consider suspending U.S. aid to Bosnia due to the unwillingness of Bosnian leaders to tackle widespread crime and corruption.

"Crime and corruption continue to pervade Bosnia's political, judicial and economic systems," the GAO said.

"U.S. and international officials further stated that this situation exists largely because Bosnian leaders from all ethnic groups have not demonstrated the political will to reform."

Mirza Hajric, the foreign policy adviser to Moslem presidency chairman Alija Izetbegovic, disagreed.

"I think a withdrawal of U.S. aid for Bosnia would send a wrong signal to the international community and only slow down our efforts to establish institutions which will help us combat corruption," he said by telephone.

Silajdzic said Western officials who were involved in implementing the Dayton peace agreement that ended the Balkan country's 1992-95 war should share the blame.

"We could have stopped many wrong things a long time ago but we did not because the international community tolerated obstructionists," he said, citing delays in the adoption of property laws and judicial reform by parliament.


Opposition political parties on the other hand, said the leadership bore the main responsibility.

"Those who are in power in Bosnia are primarily responsible for the raging corruption and crime," deputy president of the Social Democratic party Sead Avdic was quoted as saying.

"A blocking of assistance to Bosnia would be a disaster," he told Monday's Dnevni Avaz daily.

The West's top envoy in Bosnia, Wolfgang Petritsch, said on Monday the U.S. report sent an important message to local authorities and voters ahead of elections in November of the possible consequences of tolerating corruption.

Both his office, and the World Bank's representation in Bosnia, said they had put measures in place to prevent any further loss of funds, including improved auditing.

The bank said in a statement the law enforcement authorities were investigating the alleged loss of $340,000 of its funds to a fraudulent procurement scheme mentioned in the report.

The GAO report also said the U.S. had yet to recover about $900,000 in funds deposited in a now-bankrupt bank that was involved in corruption and that some $407 million in general budget support was not properly controlled.

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