Reconstructıon Of Bosnıaand Herzegovına And The Balkans

Speech

Mister Chairman, distinguished participants, dear friends; It is my pleasure to take part in this very interesting "International Balkan Congress". I would like to express my appreciation for excellent organization and commend previous speakers which offered us a lot of fresh and new ideas and views on the present situation and the future of the Balkans....

Mister Chairman, distinguished participants, dear friends;

It is my pleasure to take part in this very interesting "International Balkan Congress". I would like to express my appreciation for excellent organization and commend previous speakers which offered us a lot of fresh and new ideas and views on the present situation and the future of the Balkans.

Understanding Bosnia and Herzegovina (B&H) is not a simple task even for those considering themselves familiar with issue. Even the very name of the country combined with the names of Entities is confusing. Administrative composition and a competence division among the State, the Entities, cantons and municipalities authorities is complex and further confusing. The fact that B&H is fatherland for three different and constitutionally equal peoples will add to the puzzle. This complexity is sometimes a reason for various simplifi-cations, misinterpretations and alignment to one side in Bosnia-Herzegovina, what is not in favor of B&H itself, its peoples and, the most important, its future. That is a reason B&H is pacing two steps forward one step backward regarding its necessary reforms and the EU accession, what is main strategic and political goal of all political parties and clearly expressed wish of its entire people.

Bosnia and Herzegovina is a distinct geopolitical entity, located at the very heart of Balkans or, by Huntington's unfortunate definition, on the very line of the clash or division of civilizations. B&H is populated with people of Slavic origin and, as a heritage of a different conquers, different ruling empires which brought religion differences, there are the three peoples in B-H-Bosniaks (Muslim population), Serbs (mainly Orthodox) and Croats (Catholics), who have been living here together throughout history. 17 nation­al minorities are recognized in B&H, although there share in total population is about 2, 3 %. This conglomerate of different cultures, traditions and reli­

gions enriched B&H, particularly in culture and art, stamping a unique expres-sion in literature, music, movies est., recognizable not only in former Yugoslavia, but worldwide. But, on the other hand differences have from time to time been a reason for misunderstandings, mistrust, struggle for power and unfortunately for bloodsheds, as it was in the recent war during the dissolution process of ex-Yugoslavia.

As it is widely known, three and half year war, one of the bloodiest in the recent history, is finished by Dayton/Paris Peace Accord 13 years ago. Integral part of the Accord is Constitution of B&H. According to the Constitution, Bosnia and Herzegovina is democratic state which consists of two Entities- the Federation of Bosnia and Herzegovina and the Republic of Srpska, with con-stituent peoples-Bosniaks (43% out of total population), Croats (17%) and Serbs (33%) in both Entities. Dayton PA has established responsibilities and authorities of Entities and at the state level. The main goal of the DPA was to stop hostilities and to establish lasting peace, stability and prosperity, putting fundaments for accession to the Euro-Atlantic integrations.

During post war period, authorities of B&H with full support and assis-tance of international community has been managing twofold transition, from the war and conflict to full reconciliation and reconstruction and, from the socialist society with planned economy to modern democracy and open mar­ket economy. None of these two main goals was easy to accomplish, particu-larly bearing in mind huge complexity of each process separate. But, prospec-tive of the EU eventual membership, were attracting enough for, unfortunate-ly still entrenched, political elites from all the peoples to swallow not always easily acceptable reforms-sometimes imposed by the OHR (The Office of High Representative).

B&H has made remarkable advance in post war period. More than 1.1 mil of refugees and internally displaced persons returned to their prewar homes; a free movement of people, goods and services is re-established; infra-structure premises are mainly reconstructed as well as large number of pro-ducing capacities; the state border control is normally functioning; undertak-en reforms on creation of single economic space contributed to economic recovery and development-with steady economic growth of 6% in several recent years. Direct foreign investments reached 4.7 billion $ by the end 2007.Macroeconomic stability and the lowest inflation rate in the Region is maintained, thanking to stable currency and control over public spending. Defense reform was successfully and beyond expectation implemented, which led to B&H accession to NATO Partnership for Peace Program at the end of 2006. At Bucharest NATO Summit B&H was granted the Intensified Dialogue which is the last step in negotiation process before drafting the MAP (Membership Action Plan) application. Improvement in security area led to grad-ual reduction of international troops in B&H-from 70.000 led by NATO in 1995 to 2.500 EU troops in 2007.

B&H has established good neighboring relations with Croatia and Serbia, which are the most significant trade partners and investors in B&H. Sarajevo, not by accident, became the Headquarters of the Regional Cooperation Council and will be a center of future regional cooperation.

B&H is part of the CEFTA (Central European Free Trade Agreement) and a party in the Energy Community Treaty. CEFTA is a modern trade agreement that harmonizes trade rules across the region. Moreover, it is completely in line with the rules of the World Trade Organization and with the parties' obli-gations towards the EU. Implementation of CEFTA is expected to give a sig-nificant boost to Intra-regional trade and very importantly to improve the region's attractiveness as a destination for foreign direct investment.

Negotiating process with the World Trade Organization is at its final phase, so we can expect Bosnia and Herzegovina to join the Organization till the end of the year. Also, BIH has signed a Free Trade Agreement with Turkey, a consumer market of 70 million people. Companies operating in the country further benefit from the preferential trade regime with the European Union. This agreement allows for all goods that fulfill EU standards to be exported to each of the 27 member states without quantitative restrictions, and free of cus-toms or other duties. Besides the EU, BiH has preferential export regimes with USA, Canada, Japan, Russia, Switzerland, Australia, Norway, and New Zealand.

Yet, singing the Stabilization and Association Agreement (SAA) with the European Union in June 2008 is most significant step, opening a new opti-mistic prospective for the people of B&H. Signing the SAA, B&H entered first contractual relation with the EU and is given a status of a potential mem-ber to the EU what will have a positive impact on internal stabilization and development of Bosnia and Herzegovina. With this act, a credibility of B&H in the EU institutions, member states and entire international community is increased. In other words, with agreement implementation we can expect sig-nificant inflow of foreign investments and creation of a new working places which will improve a living standard in B&H. Everybody is happy with this development, from ordinary people to the top politicians, seeing just a final outcome of the long and a rather bumpy path ahead-a high living standards for everybody.

Experience of some countries which joined the EU since 2000, despite much better "starting position" in comparison with B&H, at the first stages was really painful. Closing down factories and small business, increasing unemployment, a price rising and diminishing a purchasing power for a most of population, were the first visible sign of a confrontation of domestic economies with powerful EU economy. In B&H case it is obvious that a weak and underdeveloped B&H economy is not ready for competition with European counterparts-especially in agriculture and industry. Even implemen-tation of the FTA with neighboring countries, not to mention CEFTA, without adequate policy measures in the country had a huge impact on widening already sore foreign trade disbalance and suffocating domestic production par-ticularly agriculture and food production. On the other hand, process of imple-mentation of necessary reforms and measures to meet requirements from the Agreement, or in other words to harmonize legal system and practice in B&H with the European standards, norms and practice in the country where previ-ously commenced transition process and reforms are not finalized yet will put additional burden to the political leaders.

Entering into force the Interim Agreement as of July 1, 2008 could cause loses in budget income and endangers a financing of public expenditures, mainly social security rights and could cause further social instability.

Signing the Agreement, the politicians of B&H took over responsibilities to carry out and implement necessary reforms in many fields, however painful they might be. I am convinced that they will prove equal to the task.

Although B&H has been making a huge progress after the war, getting an image of a modern European society and advancing towards full integration to the EU is slowed down due to almost incessant political struggles-with a rather harsh rhetoric- among political elite of the three peoples in the country. This is a reason that the Stabilization and Association Agreement, initialed with the EU in 2005 and finalizing technical negotiation at the end of 2006, is signed yet in June 2008.

Absence of will for understanding the reasons and needs of "others" and "guarding" rights of one people, making wide range of issues as an issue of "a vital national interest", can not lead to compromise and draw B&H faster to the EU. This approach is obstacle for a full reconciliation in country, which should be a main goal and first precondition for development-political, social, democratic, economic and cultural. On the other hand, it is confusing public in the country and diverting their attention from grave social situation (an unemployment rate of almost 40%, narrowed social rights and access to them, a weak administration, not yet full rule of law, est.). Some of these problems will sharpen soon and maturity of political elites in B&H will be put on trial.

For the EU, signing of the SAA is the most serious call to political par-ties in Bosnia and Herzegovina to cooperate and to return to the reforms path to the benefit of all peoples in the country.

The SAA must not be understood as social and economic project exclu-sively. At this stage the Agreement is primarily stabilization and security proj­ect for the country and the Western Balkan Region as the whole. Being- geo-graphically, culturally and politically the country in the centre of the region, the development and stability of Bosnia and Herzegovina and its advance toward the EU is of crucial importance for political developments in the region; and vice versa, of course.

Namely, with its complexity B&H is not resistant to any, even minor political event and developments in the Region, which could sparkle already divided political atmosphere and, as its outcome, overall situation in this still fragile country.

Just as an example, I would like to remind you that even possibility of Kosovo independence was a cause for sharp polarization of political scene in B&H, in which all sides, despite the Dayton PA, exposed their maximal demands. It shows Bosnia and Herzegovina's particular vulnerability to sta-bility of the region. For development of the country of tremendous importance is stability and security of the Region.

Each country in the Region keeps a steady pace on the EU path. Only clear European prospective and the faster accession of the Region, still divid-ed upon ethnical lines and deeply shaken with the independence of Kosovo, to the European Union could diminish tension and establish needed stability and reconciliation as a milestone for further development and prosperity of the Region.

"The solution for Bosnia and Herzegovina and the region called west Balkan is the European Union and there is no other alternative to it. We need security, therefore the biggest interest of Bosnia and Herzegovina is to be in good terms with its neighbors all heading toward the European Union" said B&H Presidency Chairman Dr. Haris Silajdzic in his address. According to his words, Bosnia and Herzegovina is a part of the solution because it can con-tribute to constructive dialogue. "Multi-culture and pluralism are the solution for the countries that have bitter experience like Bosnia and Herzegovina" said Chairman Silajdzic.

Thank you for your attention.

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