Nando Times
Dutch envoy accuses Bosnian government of corruption


UNITED NATIONS (August 15, 2000) - Bosnia's loss of $500 million in revenue to smugglers is so large that high-level government officials must be involved, the Netherlands' U.N. ambassador charged Monday.

"The Bosnian authorities must redouble their efforts to stamp out crime and corruption," Ambassador Peter van Walsum told the Security Council, calling current government efforts insufficient.

Bosnia's deputy U.N. ambassador Milos Prica agreed that the struggle against corruption and smuggling must be on the agenda every day, but countered that these activities are diminishing every month.

Clearly unhappy with van Walsum's allegations, he challenged the ambassador to provide names, dates and places of corrupt activities by government officials. "I think he has to bring evidence," Prica said after the Security Council meeting.

Prica noted that a former Bosnian interior minister and part-owner of a bank in which the U.S. government lost $900,000 was arrested Aug. 5, reportedly on charges related to organized crime.

The U.S. government has concluded that corruption is impeding economic, political and judicial reform in Bosnia, which has received $4 billion in outside help since 1996. In May, 46 nations on Bosnia's Peace Implementation Council said democratic reforms and the rule of law were starting to take root, but complained that corruption was running rampant.

The 1995 Dayton Peace agreement, which ended the 3 1/2-year war in Bosnia, effectively split the country into a Muslim-Croat federation and a Bosnian Serb republic and put them under international supervision.

At Tuesday's open Security Council meeting, members praised the sharp increase in refugee returns and the expansion of the multiethnic State Border Service, but called for greater efforts to build common state institutions, reform the judiciary and police, and tackle corruption.

Van Walsum said the budgets for both the Muslim-Croat federation and the Bosnian Serb republic are facing a revenue shortage of almost 30 percent - which he said was the result of a weak system of collecting duty and taxes, corruption and crime.

"It has been estimated that every year $500 million of domestic revenue is lost into smuggling, particularly of cigarettes," he told the council."Without this loss of revenue, there would be no budget deficit."

Van Walsum warned that crime and corruption threaten full implementation of the Dayton peace accord, future World Bank funding, and foreign aid.

Prica, the Bosnian envoy, called corruption a legacy of the war.

"It's very hard to fight in a short period of time," he said, "but I think there is a significant step forward in terms of seeing diminishing corruption and smuggling."

Bosnia needs widespread privatization to promote better jobs and higher salaries coupled with a new tax and banking system and better duty collections to increase the current tiny budgets and bring in more revenue, he said.

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