Country Overview
Country Facts
Overview of U.S. Government Assistance
In FY 2005, the USG allocated an estimated $54.07 million in assistance to Bosnia, including:
In FY 2005, a total of 174 Bosnians traveled to the United States on USG-funded exchange programs.
FY 2005 Assistance Overview
U.S. STRATEGIC INTERESTS
Building democracy in a country that experienced severe ethnic conflict on the heels of the fall of Yugoslavia and its communist state will continue to be a major focus for the U.S. and our allies. Though significant progress has been made in both political and economic reforms in the ten years since the Dayton Accords, much remains to be done to ensure that Bosnia and Herzegovina (BiH) is firmly on the path toward Europe and Euro-Atlantic integration, and to set the stage for the phasing-out of international supervision by the Office of the High Representative (OHR). BiH's two sub-state entities, the Republika Srpska and the Bosnian Federation, are still not fully united under a national government, and the economy needs reform and foreign capital. Although state-level institutions are becoming more firmly grounded and are gaining increased authority, there remains a fair amount of confusion regarding jurisdictional matters between the entities and state-level institutions. State-level law enforcement and security structures are nascent. This, coupled with BiH's porous borders and persistent corruption, makes BiH an attractive destination and transit point for terrorists and traffickers. To develop a coherent, stable BiH on its way to NATO and European Union (EU) membership, the U.S. and its allies must continue to work with BiH authorities to eliminate terrorist elements, promote regional cooperation and stability, strengthen institutions to counter trafficking and organized crime, build a self-sustaining economy less reliant on foreign assistance, increase interethnic cooperation, and strengthen BiH's civil society.
KEY ISSUES
The Dayton Accords left BiH with complicated multiple levels of jurisdiction at the state, entity, cantonal, and municipal levels. Efforts to affect constitutional reform to rationalize the state-level structures of government and bring BiH closer in line with European norms began late in 2005 and are expected to carry over into 2006, in advance of national elections set for October. In an important step forward for BiH, the EU agreed in November to begin Stabilization and Association Agreement (SAA) talks. BiH has significant work ahead to adapt its governance structure to EU requirements. As the OHR phases out and the international community reduces its footprint in BiH, Bosnian authorities will need to take on a greater share of responsibility for their own governance. Key priorities for USG assistance are efforts to enhance BiH's ability to combat terrorism, defense reform and enhanced regional stability, strengthened rule of law capabilities, particularly on the state level, economic reform, and the further development of democratic practices and values, and interethnic tolerance.
Development of state-level law enforcement capacities was significant in 2005. BiH established a Foreigner Affairs Service to deal with immigration issues under the auspices of the BiH Ministry of Security, an important addition in capability to the already existing State Investigative and Protection Service (SIPA) and State Border Service (SBS). The BiH parliament passed amendments to the Law on Citizenship which will allow the government to deal definitively with those foreign fighters who came to BiH during the war and obtained citizenship, an important step towards fighting terrorism. The next step in this anti-terrorism effort is the formation of a commission to review specific cases, a process that merits close monitoring. The Special Chamber for War Crimes officially opened; the International Criminal Tribunal for the Former Yugoslavia (ICTY) transferred two of its indictments to BiH for local prosecution, and a 21-bed facility to house war crimes suspects opened. BiH authorities were able to come to agreement on a process to establish an efficient and integrated police force, a key requirement for BiH to begin SAA negotiations. Challenges for 2006 include strengthening law enforcement, particularly at the state level, integrating police structures within the context of police reform, developing judicial capacities, and improving the ability of prosecutors to effectively pursue criminal cases against extremist groups and corrupt officials, as well as prosecute war crimes cases transferred to BiH from the International Criminal Tribunal for the Former Yugoslavia (ICTY).
BiH deployed an explosives ordnance disposal (EOD) unit to Iraq in June 2005, in support of Coalition efforts; a second rotation deployed in November. Defense reform legislation adopted in 2005 set into motion a two-year process on January 1, 2006 to abolish the entity Ministries of Defense, create a single multi-ethnic armed force under a single command and control structure, eliminate conscription, and centralize all budget functions at the national level. These reforms are at a critical juncture, and sustained USG assistance is crucial to guaranteeing successful implementation and the development of NATO-compatible military structures.
In early 2006, BiH will introduce a state-level value-added tax. USG assistance has focused on direct tax reform; in 2005, new legislation on both personal income tax and corporate profits tax was drafted and began moving through the parliaments. Harmonizing and streamlining the disparate tax systems in BiH's two entities will improve the business climate for both foreign and domestic businesses operating in the country. USG efforts to strengthen municipalities through direct allocation of revenues, making government more responsible to its citizens, had success in late 2005 with the passage of revised legislation to allow for a more transparent transfer system as well as greater flows of resources to municipalities. Additional reforms to rationalize BiH's complicated government structures are needed, including reforms to establish better government accountability. Political parties must also improve their responsiveness to their constituents. They, along with the media and civil society, must take a more proactive role in holding government accountable and promoting democratic norms and values.
COUNTRY PERFORMANCE MEASURES
Bosnian Democratic Reform
The "radar" or "spider web" graphs below illustrate Bosnia's democratic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark lines indicate how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and, (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country_progress/.
The graph shows
*Actual 2005 not yet available.
The graph shows
*Actual 2005 scores not yet available.
Bosnian Economic Reform
The "radar" or "spider web" graphs below illustrate Bosnia's economic performance during 2004. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2004 performance levels, while the two dark line indicates how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 9 (April 2005). Found online: www.usaid.gov/locations/europe_eurasia/country_progress/.
The graph shows
*Actual 2005 scores not yet available.
The graph shows
*Actual 2005 scores not yet available.
FY 2005 Country Program Performance
Democratic Reform
Bosnia and Herzegovina continued to make progress in its democratization efforts in FY 2005. In particular, efforts to bring about constitutional reform and rationalize BiH's complicated structures of government have begun to gain momentum. Municipal elections in October 2004 showed some surprising gains for moderate parties, but politics are still very much in the hands of the nationalist parties. Corruption, bureaucratic inertia, and political infighting continue to complicate the business of government. BiH is burdened by its expensive system of multiple and overlapping layers of government (state, entity, cantonal, and municipal), which often do not work in concert. State-level structures remain relatively weak.
BiH's inefficient governance structure is a constraint as it begins the SAA process with the EU. A redistribution and clarification of responsibilities among levels of government will be required, particularly at the state and local levels. The authorities and responsibilities of local governments need to be expanded and clarified since municipalities presently do not have adequate resources to provide even basic services. Municipal responsibilities are often "shared" with higher level governments, meaning in practice no single level of government or bureaucratic unit is accountable, leaving citizens with no clear path for redress. Government and political party structures must improve their responsiveness to their citizens, institutionalizing democratic values and practices. Media organizations, civil society, and political parties all have a role to play in arbitrating public policy questions and the role of the state. Actors in each of these areas face a unique set of challenges, but share in common a relative passivity and the need for further professional development.
U.S. ASSISTANCE PRIORITIES
In FY 2005, USG-funded democratic reform assistance focused on strengthening citizen participation in political, social, and economic decision making. Civil society programs funded local efforts to influence policy making and increase local non-governmental organizations' (NGOs) capacity to advocate for their constituencies and increase their sustainability through improved fund-raising techniques. USG assistance provided support to political parties and legislatures to improve their accountability to their constituents with local government support concentrating on delivering more effective services to citizens. In the final phase of another local support program, U.S. and local NGOs assisted communities with minority returnees by providing grants for infrastructure and employment generation activities. To foster politically independent media that are professional and economically sustainable, a USG-funded program worked to strengthen private sector media outlets by improving their ability to provide fair and true accounts of events, thereby increasing citizens' access to objective information. The U.S. is working to develop the legal, policy, and regulatory environment in BiH for media through assistance to a broadcast regulator and to industry associations.
PROGRAM PERFORMANCE
U.S. policy has focused on strengthening municipalities, which have direct ties to citizens and reduce wasteful duplication of services at the cantonal and entity levels. An important effort has been work on revenue allocation laws which will allow for a transparent revenue transfer system and enable greater flows to municipalities. Enactment of new legislation at the end of December 2005 marks a significant improvement in the financing of the intergovernmental system. Efficiency in local government has been promoted through the development of One-Stop-Shop service centers. The time needed for citizens to conduct business with government has been reduced, in many cases by as much as 70 percent. Assistance in FY 2005 enabled 26 municipalities to open new One-Stop-Shops, making a total of forty-six municipalities that have initiated this service. Additionally, financial systems to improve local accountability and budgeting were completed in about one-third of BiH municipalities by the end of the year.
With national level elections scheduled for October 2006, USG programs focused on long-term efforts to improve accountability of political parties and parliaments. The U.S. provided non-partisan training for opposition parties to modernize, build coalitions, and improve grassroots work. USG assistance programs provided parliamentary support to promote the development and efficiency of caucuses and committees, and assisted government ministries to improve their communications strategies. USG-funded programs also supported the continued nationalization of the electoral process by providing training to the newly independent Election Commission (ECBIH), including elected officials, officeholders and their advisors, on their obligations within the framework of the BiH Conflict of Interest Law.
In FY 2005, assistance to civil society continued through institutional capacity-building programs, as well as through support to larger public campaigns, resulting in much-needed policy changes at various levels of government. USG assistance enabled several NGOs to utilize new marketing and fundraising techniques that benefited the respective NGO constituency groups. Donations generated through this effort helped support disadvantaged children and those orphaned during the war. The USG funded policy research grants to build indigenous policy-making capacities in BiH with a research grant to the Economics Institute of Banja Luka helping to rationalize the health sector in the Republika Srpska. Other U.S. assistance supported advocacy programs, watchdog efforts, and service provision to meet citizens' needs. Small, targeted grants funded local democratic initiatives ranging from projects to improve gender equality, to efforts to improve computer technology in local schools, to assisting the Roma community in carrying out a population survey.
FY 2005 USG assistance supported civic education programs, providing teacher training and supplying new civics textbooks for students and teachers. To ensure the quality of the teaching, a comprehensive two-week certification was held for secondary school teachers. Outreach to Islamic communities was furthered by a school connectivity program, which links Islamic elementary schools to each other and to Orthodox and Catholic religious schools with the help of English language teaching fellows. The USG also funded youth outreach programs; every summer 300 students from all parts of the country are brought together for a five-day conflict resolution and tolerance building workshop. These programs encourage the fostering of a multiethnic society in BiH by promoting dialogue and mutual understanding, and encourage participation in community-based projects to further public policy changes.
In FY 2005, the U.S. continued to fund efforts by the International Commission on Missing Persons (ICMP) to resolve the disappearance of up to 30,000 persons presumed killed in the war. In 2005, BiH created a unified Missing Persons Institute (MPI) in accordance with provisions of the 2004 Law on Missing Persons. The MPI will continue the process of exhumation and identification of all persons still missing from the 1992-1995 conflict, regardless of ethnicity.
In broadcast media, USG support to the Communications Regulatory Agency (CRA) enhanced its ability to function effectively, as it completed the transition from an international community-created and staffed body to an independent domestic, state-level institution able to operate without international advisors. USG assistance to professionalize both print and electronic media resulted in more independent and objective reporting, regardless of political affiliation. Owners and managers of media outlets received high level management and financial training. In-depth investigative reporting highlighted corruption, wrongdoing, and poor performance on the part of government officials. A consumer protection series was initiated and served as a catalyst for government reform to correct misleading advertising. The USG continued to work to build effective journalist associations capable of protecting members' rights and helped the BiH Press Council foster professionalism through self-regulation. Efforts to reduce ethnic reporting bias were enhanced with the establishment of a multi-ethnic journalist association and, similarly, with progress by publishers who agreed to create a unified publishers association.
U.S. assistance is effectively coordinated with other donors, including the EU (collectively and through individual members), Canada, the Organization for Security and Cooperation in Europe (OSCE), Council of Europe (COE), and the World Bank. All provide assistance on various aspects of democratization, although USG funding is often more targeted, such as civil society programming. The phase-out date for USG assistance in this sector is 2014+.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how USG assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Democratic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of USG assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 31 of the following year. "CY" stands for "calendar year," or January 1 - December 31.
Performance Indicator: NGO Sustainability Index 2004. Seven different dimensions of the NGO sector are analyzed each year in the NGO Sustainability Index: legal environment, organizational capacity, financial viability, advocacy, service provision, NGO infrastructure and public image. The NGO Sustainability Index uses a seven-point scale, to facilitate comparisons to the Freedom House indices, with 7 indicating a low or poor level of development and 1 indicating a very advanced NGO sector. Source: USAID, 2004 NGO Sustainability Index for Central and Eastern Europe and Eurasia. May 2005. Found online: www.usaid.gov/locations/europe_eurasia/dem_gov/ngoindex/2004/.
|
CY 2002 Baseline |
CY 2003 Rank |
CY 2004 Target |
CY 2004 Rank |
|
4.2 |
4.1 |
4.0 |
4.0 |
USG assistance contributed to the above indicator by focusing on strengthening institutional capacity in NGOs, including techniques in marketing and fundraising which led to significant benefits accruing to the respective NGO constituency groups. Targeted grants to local policy research institutions have encouraged indigenous policymaking capabilities. Small grants have focused on assisting domestic NGOs to develop their ability to carry out projects that enhance democratization efforts at the local level and to increase local capacity.
Performance Indicator: Media Sustainability Index 2005. The MSI assesses five "objectives" in shaping a successful media system: free speech; professional journalism; plurality of news sources; business management; supporting institutions. The 2005 rank below represent the average of the scores of the five objectives. The MSI uses a four-point scale, with a 0-1 range indicating unsustainable, anti-free press, a 1-2 range indicating an unsustainable mixed system, a 2-3 range indicating near sustainability, and a 3-4 range indicating a sustainable, free media environment. The CY 2005 rand below is based on data collected in 2005. The Source: USAID/IREX, Media Sustainability Index 2005. Found online: www.IREX.org.
|
CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
2.09 |
2.52 |
2.50 |
2.41 |
From 2004 to 2005, Bosnia experienced slight decreases in the scores of four of the five objectives and a greater decrease (2.54 to 2.31) in supporting institutions. While a good part of the media are trying to operate in line with professional norms and ethical standards, a certain number of outlets, mainly print media, continue to produce content with nationalistic themes and are generally limited in their reach to one or the other of Bosnia's two sub-state entities. USG assistance fostered increased independent and objective reporting, regardless of political affiliation, and taught sophisticated business practices and advanced production techniques. Assistance to journalism associations enhanced these groups' abilities to protect their rights and foster professionalism through self-regulation.
Economic Reform
The IMF projects BiH's GDP growth for 2005 at 5 percent, down from an estimated 6 percent growth rate in 2004. Inflation continues to be low, largely due to the efforts of BiH's currency board. The BiH economy remains uncompetitive on the world market and exports have trailed imports by a factor of about three to one in the recent past. The IMF's preliminary current account projection estimates an imbalance amounting to around 23.5 percent of GDP, one of the highest in the world (as a percent of GDP). The current account deficit has been financed in the past through a combination of assistance flows, remittances, and foreign direct investment (FDI). BiH's FDI at present is among the lowest in the Balkan region at an estimated $240 annually per capita due to a very weak business environment characterized by excessive government regulation and corruption. This weak macroeconomic situation continues as an area of potential instability and concern. As assistance flows decline, obstacles to investment must be reduced and all efforts made to expand the private sector, improve its competitiveness, and increase exports. Currently, exports are dominated by raw materials, unprocessed agricultural commodities, and timber. With USG assistance, the private sector is growing, albeit slowly. In 2005, the private sector increased as a percentage of GDP from 51.1 percent to 52.2 percent. The World Bank estimates that 18 percent of the population lives below the poverty line. The unemployment rate is estimated at 44 percent; however, if employment in the gray economy is included, the figure falls to around 20 percent.
U.S. ASSISTANCE PRIORITIES
USG assistance in FY 2005: improved the business environment for small and medium-sized enterprises (SME); increased the competitiveness of firms in key industries; developed and strengthened banking sector institutions; led efforts to restructure BiH's heavy domestic debt burden; helped modernize direct tax administration; and improved the commercial legal and regulatory environment dealing with transactions, bankruptcies, and dispute adjudications. U.S. assistance programs also supported restructuring and regulatory oversight of the energy sector, an area with potential to create export earnings and provide employment.
PROGRAM PERFORMANCE
The USG has continued to assist in efforts to restructure BiH's burdensome domestic debt, a highly contentious issue in BiH. USG advisors assisted in drafting the necessary legislation and in securing its passage through parliaments. USG efforts also continue to train regulators and participants, and provide technical support to BiH's nascent government securities market.
USG assistance supports efforts to develop small and medium-sized enterprises (SMEs). BiH businesses face a difficult maze of bureaucratic registration procedures and permits when attempting to start up or expand businesses. The average time to obtain government permits to start a new business is 60 days. It takes 277 days to obtain a construction permit. The U.S. began a new program in the last month of FY 2005 to address these problems, specifically to help the various governmental units responsible for regulating businesses streamline their administrative procedures. Working groups of government and business representatives from across BiH are being formed to devise ways to improve the situation.
USG-funded programs assisted three key industrial sectors with high potential to become competitive: agriculture; wood processing; and tourism. Program activities provide technical assistance for product development, marketing, and financial management to firms in these sectors. A USG-supported Development Credit Authority (DCA) has helped facilitate access to credit for firms facing short loan maturities and high collateral requirements. Under this program, three BiH participating banks can receive 50 percent guarantees on the principal of loans offered to companies in the agribusiness, wood processing, and tourism sectors; a total of 109 SMEs have received loans amounting to $18 million, which has led other commercial banks to offer more competitive terms to businesses. These programs have led to the creation of 1,500 new jobs, the retention of other operations accounting for another 1,700 jobs, and a 5 percent increase in agricultural exports in 2005.
BiH has achieved one of the strongest banking sectors in the Balkan region. Assets of the sector have grown significantly, reaching 70 percent of GDP in 2004. Ten years of USG lending programs, capacity building in banking supervision, support for banking operations, assistance and support to the Central Bank, as well as the creation and strengthening of a deposit insurance program, are at the foundation of these gains. Public confidence in the banking system has increased, resulting in deposits of five billion dollars. The USG helped BiH to develop a modern computerized system to overcome the difficulties banks faced in enforcing pledged collateral. This pledge registry system for claims on movable property has been housed in the Ministry of Justice and is now being used by all banks, leasing companies, and microfinance institutions. The registry, with over 10,000 property registrations to date, has established a more secure and predictable environment for banks to lend to SMEs and individuals who wish to use movable property as collateral. Current efforts in the banking sector focus on transferring bank supervision from the entity to the state level.
BiH is currently in the midst of a major tax reform. A consistent and harmonized tax regime is critical for effective business operations throughout BiH and greater foreign investment. The USG has assisted government counterparts in modernizing tax information and develop the analytical capability needed for effective administration, and has supported policy reform, including the development of new personal and corporate tax laws. Efforts to assist the tax administration to date have resulted in harmonized tax rules and regulations across the entities. In addition, a 15 percent increase in revenue collections, nearly three times the overall GDP growth, was recorded.
USG-funded programs have continued to work on strengthening commercial law on bankruptcy and collateral. Improvements in commercial sector efficiency depend upon an effective court system. Technical assistance and educational programs have helped to improve foreclosure procedures. Significant efforts have been made in training and assisting practitioners in the area of bankruptcy. As a result, the first bankruptcy case was finalized this past year, releasing assets for future use and development. Case management software to help improve court procedures for commercial cases will soon be launched in three pilot courts.
The USG assists the Ministry of Foreign Trade and External Relations (MoFTER) in its efforts to attain membership in the World Trade Organization (WTO), including capacity building within MoFTER, improved public outreach on trade issues, and training on intellectual property rights issues. The USG is assisting in building the capacity of the State Veterinary Office, supporting the development of modern agricultural inspection posts at the border, and providing short-term training on a variety of agricultural topics.
Energy sector reform has made progress. Action plans are in place to implement the restructuring of electricity companies in order to segregate transmission and production. The state law for transmission of electric energy mandated the creation of a state-level transmission company and a state-level independent system operator. USG assistance has funded activities to strengthen the regulatory commissions' control over electricity generation, transmission, and distribution, and to develop rules and methodologies to govern the issuance of licenses and tariffs. Training activities have also included monitoring, enforcement, and conducting public hearings. As a result, all three BiH regulatory commissions are fully functional and are operating in an open and transparent manner.
The USG collaborates closely with other donors, including the EU and its member states, the World Bank, and the EBRD on economic and social sector reform projects. USG assistance is characterized by its focus on specific funding gaps and flexibility. The phase-out date for assistance in this sector is 2014+.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Economic Reform. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.
Performance Indicator: Share of General Government Budget Revenue in GDP. This indicator addresses the status of tax reform and budget performance. As revenues rise, the IMF looks at macro-economic indicators such as total spending (and its major components like consumer spending and business investment), revenue, output, employment, and inflation, as well as the country's balance of payments. Source: IMF BiH Mission Report 2005. The 2005 data were collected in 2004. The IMF BiH Mission Report 2005 is not yet available online.
|
FY 2002 Baseline |
FY 2003 Rank |
FY 2004 Target |
FY 2004 Rank |
FY 2005 projected |
|
48.6 percent |
48.8 percent |
48.0 percent |
47.8 percent |
50.8 percent |
USG assistance contributed to a decrease in government spending through the successful conclusion of the U.S.-led defense reform process that has set the stage for medium-term reductions in military spending, although merging and standardizing entity-level defense ministries and staffs at the state level will require modest spending increases in the short term. Continued U.S. assistance for tax modernization is ensuring that tax revenues remained stable even as staff and responsibilities migrated from the entity to the state level. As a result, Bosnia has finished 2005 with a healthy primary budget surplus estimated as high as 1 percent of GDP.
Performance Indicator: Bosnia's Internal Debt Crisis Resolved. This indicator addresses the status of Bosnia Herzegovina's internal debt crisis. Source: U.S. Embassy.
|
FY 2003 Baseline |
FY 2004 Actual |
FY 2005 Target |
FY 2005 Results |
|
BiH internal debt estimated at over 200 percent of GDP. No legal framework for debt issuance or restructuring. No sovereign debt market operating. |
Eight laws drafted and five passed to restructure internal debt. Work begun to develop procedures to register and verify claims. |
State and entity debt framework laws adopted. |
The state framework law was adopted. Entity-level laws have been drafted. |
In 2005, Bosnian courts declared a number of the IMF-imposed elements of the entity-level debt restructuring laws unconstitutional. Revised state-level legislation to conform with recent court decisions on frozen foreign currency deposits, which effectively set aside the IMF's 10 percent ceiling, has been drafted with U.S. assistance and is now in parliamentary procedure. Hardware and software for the government securities market has been procured and is in the process of being installed. Training on the new market for government and market participants has begun.
Security, Regional Stability and Law Enforcement
State-level institutions responsible for counterterrorism efforts, defense, law enforcement, and judicial and legal reform continued to make positive progress in 2005, laying the basis for overall improvement in the functioning of the rule of law within BiH. Coordination among law enforcement bodies and prosecutors improved considerably, but challenges remain, owing to administrative roadblocks, interagency rivalries, and still weak state-level institutions. The USG supports efforts to build internal reform capacity so that BiH can reduce its current reliance on international personnel and organizations for the administration of justice.
Notwithstanding the progress that has been made, there remains widespread cynicism among citizens about the transparency and efficacy of Bosnian rule of law. Key remaining issues are BiH's porous borders, weak interagency cooperation among law enforcement agencies, inconsistency in the application of law, the nascent institutional capacity of key government agencies and departments, political influence over the judicial system, inefficient court systems, lack of enforcement of judgments, corruption, and lack of quality legal representation. Trafficking in Persons (TIP), particularly women and girls, is a continuing problem in BiH and in neighboring countries; efforts to combat it remain a USG priority. As part of the two-year defense reform process beginning January 1, 2006, the entity Ministries of Defense (MODs) will be abolished and all defense competencies will be transferred to the nascent state-level MOD. The entity armies will transform into a unified, multi-ethnic, NATO-compatible professional military under a single command and control structure with niche contributing capabilities.
U.S. ASSISTANCE PRIORITIES
In FY 2005, the USG provided assistance to strengthen and expand BiH's ability to combat terrorism, including assisting state and entity-level law enforcement bodies with mentoring, equipment, technical assistance, and training. Significant USG support is provided to the state-level Ministry of Security (MoS), State Investigative and Protection Agency (SIPA), State Border Service (SBS), and the new Foreigners Affairs Service (FAS), who all play a role in combating terrorism. In FY 2005, USG assistance played a key role in the adoption of a major defense reform package. Efforts have concentrated on strengthening state-level institutions in conjunction with defense reform efforts, developing BiH's ability to contribute to peace support operations, and supporting demining efforts. U.S. assistance has strengthened the capacity of state and entity-level law enforcement bodies to effectively and efficiently develop, coordinate, and administer justice sector policies. These organizations received mentoring, equipment, technical assistance, and training to improve their ability to combat criminal activity, including terrorism, trafficking in persons, and organized crime, and to improve immigration, border security, and customs controls. The U.S. continued to target improvements in the efficiency, transparency, and fairness of the BiH justice system by providing training and technical assistance to key judicial institutions, improving court administrative procedures, and ensuring fair and equal access to justice.
PROGRAM PERFORMANCE
In FY 2005, USG assistance supported BiH's counterterrorism (CT) capabilities. USG-funded experts spearheaded the effort to create a Counterterrorism Strategy Working Group composed of mid-level officials from all relevant institutions to create a national CT strategy for BiH. U.S. advisors provided mentoring and advice to law enforcement agencies and supported the development of a centralized database to enable BiH authorities to obtain better and more timely information. USG assistance to the SBS helped strengthen BiH's immigration enforcement abilities and its border security efforts, including its real-time access to information. The USG also helped customs officials improve their ability to prevent smuggling of contraband goods. A USG-funded "green border" system of electronic sensors now allows the SBS to monitor cross-border traffic outside of manned border crossings, enhancing its ability to combat illegal migration, trafficking in persons, smuggling, and terrorism.
USG assistance continued to strengthen state-level law enforcement agencies (MoS, SIPA, SBS, and FAS) and provide support to entity-level police bodies. Advisors in these bodies provide on-site technical assistance and training, such as specialized CT, witness protection, police procedures, evidence handling, trafficking in persons, civil disorder, financial crimes, and war crimes training. The USG aided in the development of a national action plan for the fight against organized crime (OC), and was instrumental in the establishment of two major OC task forces. In 2005, 15 OC cases were presented for prosecution to state and entity prosecutors. USG assistance provided the equipment and training to integrate criminal justice databases to improve the flow of case information among law enforcement agencies, the courts, and prosecutors' offices, and for the sharing of criminal intelligence and investigative information.
For the first time, as a result of defense reform accomplished in 2005, BiH has a single Ministry of Defense, Joint Staff, Operational Command, and armed forces, effectively removing the last military vestige of the war. All technical benchmarks for Partnership for Peace have been met. USG assistance has improved the MOD's infrastructure, helped equip the Joint Staff and Operational Command, and provided training to improve the professional development of the BiH military. BiH deployed two six-month rotations of an explosive ordnance disposal (EOD) unit to Iraq in support of coalition efforts and is in the process of committing to three more rotations. These EOD units destroyed over 250 tons of unexploded ordnance, making Iraq safer for the Iraqi people and coalition forces.
Bosnia made significant strides in developing its capacity to investigate, apprehend, and try war crimes cases. In FY 2005, the State Court's Special Chamber for War Crimes, the State Prosecutor's Office, and the War Crimes Registry became fully functional. The USG was the major donor of financial resources to these institutions. The USG continued to fund a project manager in the Registry and to second judges and prosecutors to build local capacity. A 21-bed pre-trial detention center, the only state-level facility appropriate to house war crimes suspects, was completed. The International Criminal Tribunal for the Former Yugoslavia (ICTY) officially transferred two of its indictments to the BiH State Court for local prosecution. The first war crimes indictment brought domestically by a Bosnian prosecutor at the BiH State Court (i.e., the first "rules of the road" case) came to trial, and two other "rules of the road" war crimes indictments were confirmed.
In FY 2005, USG assistance continued to strengthen state-level judicial institutions. Working with the High Judicial and Prosecutorial Council (HJPC), USG advisors developed a strategic reform plan, conducted public discussion of codes of ethics for the sector, and introduced new methods for assessing judiciary performance. USG funding resulted in the creation of a state-level Professional Association of Prosecutors and Professional Association of Judges. The position of Chief Disciplinary Prosecutor for the HJPC, which had been held by an American, is now filled by a Bosnian national. Bosnian prosecutors and judges conducted at the BiH State Court their first OC trial (exclusive of international advisors), resulting in the conviction of seven individuals for organized crime, kidnapping, robbery, narcotics sale, and extortion.
USG assistance also strengthened judicial institutions at entity and cantonal levels through seminars on the Criminal Procedure Code and legal mechanisms such as the plea bargain. USG assistance funded a successful "model court" case management project in four courts that improved the court's efficiency and responsiveness to the public, and significantly reduced case backlogs in four municipalities. In FY 2006, the project will be expanded to include ten more municipalities, and ultimately the system will be employed nationwide. Assistance to the state-level Ministry of Justice concentrated on developing a plan to improve the Ministry's operation. USG-funded training and technical assistance also facilitated interagency coordination between prosecutors and law enforcement agencies. As a result, BiH made significant strides in investigating and prosecuting complex crimes, including organized crime, financial crime, terrorism, and war crimes.
Corruption seriously erodes the functioning of Bosnia's political, public, and business life. Many USG programs in the areas of economic restructuring and democracy reform are targeting at eliminating the structural underpinnings of corruption by improving systems and enhancing transparency. The USG supported efforts to educate citizens about the problems of corruption in order to improve government accountability, and provided advising on the legal and institutional channels to address public sector corruption. Along with secondments to the BiH State Court, the USG funded the OHR Criminal Investigative Unit (CIU), which provided investigative assistance to the State Court, positions in OHR's Rule of Law Department, and OHR's Office of the Special Auditor.
In 2005, BiH continued to combat trafficking in persons (TIP). In close cooperation with the State Coordinator for Anti-Trafficking and Illegal Immigration, the USG provided support through local NGOs for shelter and safe houses, and supported an SOS hotline that victims could access for help, as well as a program to facilitate victim reintegration into society. US-funded activities provided training to legal advocates to assist them in providing special care for victims. The USG worked with various local stakeholders and funded a trafficking prevention campaign to inform the population about the threat of HIV and other sexually transmitted diseases via an information-dissemination campaign centered on educational workshops for children and youth, parents, and school management. USG assistance continued to support the BiH Anti-TIP Strike Force with technical advice and formal and informal training sessions. A BiH State Prosecutor effectively used plea bargains and cooperation agreements to convict four defendants accused of trafficking girls from Moldova, Romania, and Ukraine.
USG assistance in the area of Bosnian defense reform is the sole foreign contribution of size. USG rule of law assistance programs are closely coordinated with other donors to eliminate duplication and ensure the broadest possible coverage. Other donors include the EU, Canada, Sweden, the OSCE, the World Bank, UNHCR, and the Council of Europe. Phase-out of assistance in this sector is projected for 2014+.
MEASURES OF PROGRAM EFFECTIVENESS
In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.
Please find below two important indicators in the area of Security, Regional Stability and Law Enforcement. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.
Performance Indicator: Judicial Framework and Independence Rating. This indicator highlights constitutional reform, human rights protections, criminal code reform, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. (7-point scale: 1 is the highest, 7 is the lowest). Source: Freedom House, Nations in Transit 2005. This volume covers events from January through December 2004. Found online: www.freedomhouse.org/research/nattransit.htm.
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CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
5.00 |
4.50 |
4.25 |
4.25 |
The indicator above demonstrates some improvement in the reform of the judiciary. The rating for judicial framework and independence improved from 4.50 to 4.25 owing to the continued vetting of the judiciary, consolidation of supervisory bodies, and increased readiness (under pressure) of Republika Srpska authorities to face up to war crimes. In particular, USG assistance to the HJPC has improved the administration of justice in BiH via establishment of codes of ethics and methods for assessing judicial performance. The "model courts" project has strengthened the courts' efficiency and responsiveness to the public, and significantly reduced case backlogs in four municipalities. Assistance to the BiH State Court and the War Crimes Chamber has improved the state's ability to prosecute serious crimes, including war crimes, OC, and corruption. BiH received its first two cases from the ICTY for domestic prosecution. The USG trained prosecutors and police officials in the CPC and in legal mechanisms such as the plea bargain.
Performance Indicator: Corruption Rating. This indicator assesses: implementation of anticorruption initiatives; government's freedom from excessive bureaucratic regulations and other controls that increase opportunities for corruption; public perceptions of corruption; business interests of top policy makers; laws on financial disclosure and conflict of interest; audit and investigative rules for executive and legislative bodies; protections for whistleblowers, anticorruption activists and others who report corruption; and the media's coverage of public sector corruption. (7-point scale: 1 is the highest, 7 is the lowest). Source: Freedom House, Nations in Transit 2005. This volume covers events from January through December 2004. Found online: www.freedomhouse.org/research/nattransit.htm.
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CY 2003 Baseline |
CY 2004 Rank |
CY 2005 Target |
CY 2005 Rank |
|
5.00 |
4.75 |
4.50 |
4.50 |
The 2005 rating above shows some improvement from 4.75 to 4.50 due to auditing organizations successfully revealing corruption and abuse of funds. USG assistance funded international prosecutors to the BiH State Court, which conducted prosecutions of high-level corruption cases. USG support to OHR's CIU supported investigations of political crimes and corruption, and support to the OHR Special Auditor helped expose corruption through audit reports. A USG project to simplify the business registration process is eliminating opportunities for corruption in starting up businesses. Support to NGOs educated citizens about the problems of, and channels for addressing corruption. Independent media support aided public exposure of corruption problems via investigative reporting of public sector corruption.
Click for FY 2005 Funds Budgeted for U.S. Government Assistance to Bosnia-Herzegovina [PDF format]
