Bosnia and Herzegovina – the European path or the ethnical division?

Bosnia and Herzegovina, still on the EU integration agenda

The North Atlantic Alliance and the European Union (EU) are significantly interested in the Western Balkans region, as it does have an instability potential. The destabilization risk might increase if the Western accession options are limited by the political situation developments, locally and regionally, by China’s influence, which seems to be involved in the entire region, but also Russia’s, especially in Srpska Republic (RS), dominated by Serbians.

In BiH, after signing the Dayton Peace Agreement (DPA), in 1995, the nationalist parties of the main ethnical communities (Bosnians, Serbians and Croatians) have dominated the political scene in this country.  These tendencies were highlighted also by the last electoral processes, the local elections organized in 2016 and the general elections from 2018, whose final results show no difference in terms of the tendency to vote following ethnical lines and, implicitly, for nationalist parties. The Serbians and the Croatians are joining forces to continue to federalize the country, and the third main ethnical group, the Bosnians, is strongly opposing such an initiative.

Currently, the Western Balkans situation is on the agenda of the German EU Council presidency, yet the concrete progress of the region’s states in the integration process in the EU depends on their own commitment to the rule of law and the freedom of the press, as Susanne Schutz, the director for Southeastern Europe was underlining, Turkey and the states from the European Free Trade Association (EFTA) (Iceland, Liechtenstein, Norway and Switzerland) from the Foreign Federal Office, Germany.

Concretely, S. Schutz says that she wants to see the “renewed impulse” in the EU-Western Balkans relations, especially given the EU’s decision to give the substantial solidarity package worth of 3, 3 billion euro, agreed for the entire region, to cool down the COVID-19 pandemic’s consequences.

Bosnia and Herzegovina issued their accession request to EU on February 15^th 2016 and, then, on September 20^th 2016, the EU Council has invited the EU Commission to present its note on it. This is part of the procedure foreseen in Article 49 of the EU Treaty[1], which says that “Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. The applicant State shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the consent of the European Parliament, which shall act by a majority of its component members. The conditions of eligibility agreed upon by the European Council shall be taken into account”.

However, given the slow process regarding the EU and NATO accession, BiH was left behind comparing to other Western Balkans states and does not seem to be able to implement the requested reforms according to the two objectives. It is quite clear now that, according to the current constitution, founded through DPA, the decisional BiH process follows ethnical lines, such an evolution raising a complex system that adopts decision within the national level and also the level of each entity (the Croatian-Muslim Federation and the Srspka Republic).

This development is worsening the consensus process necessary for the integration process in EU and NATO.

In the last 14 months, BiH’s developments showed us clearly that the EU-BiH relations are still frozen, and there is no doubt that 2019 was lost in terms of the integration process of BiH in EU and, implicitly, in NATO. In the near future, we can only foresee minor developments for BiH, especially considering that creating the new government lasted a lot, starting with the general elections organized in October 2018 up to the middle of December 2019, when a new Ministers’ Council was created, led by Zoran Tegeltija (SNSD – a political group of Serbian conservatives nationalists), supported by the other two main conservative-nationalist parties (SDA – Bosnian nationalists, HDZ – Croatian nationalists).

A turning point took place at the end of May 2020, when the EU Commission published its note on the BiH request, light in terms of language, yet harsh on its content, talking about the planning phase as being “incipient”, recommending “significant intensification” to get in line with EU’s standards. Thus, there were identified essential priorities in the legislative and institutional BiH framework, regarding four fields: democracy and functionality, the legislative field, fundamental rights and public administration. The list with all the check points include, on one hand, structural matters, like discriminatory electoral systems (being mentioned explicitly the Sejdić-Finci case[2] and, respectively, municipal elections in Mostar, which were not held since 2008[3]) and the reform of law bodies. On the other hand, there were identified recent circumstantial issues affecting the freedom of speech, the repeated attack on journalists and the restrictions imposed to certain social movement bodies, which were mentioned in the analytic report of the Commission.

After the last developments, the registered failures have consolidated the idea that giving BiH the candidate status, required in 2016, would be postponed at least after 2020. An additional proof that the main EU accent in BiH goes from social-economic reforms (extremely important after the social protests in 2014) to the justice and rule of law system is to be found in the Report on the Rule of Law Problem. The report, presented to the Commission in December 2019, by the juridical expert and former director of the Commission, Reinhard Priebe, was critical and drew the attention of the public opinion.

Germany, together with the EU Delegation in BiH and other states with similar ideas continue, however, to support this state in the Western Balkans in its reform process. An important aspect for the European Commission’s priorities, presented in the note on the accession request of BiH, is the organization of electoral processes, being praised also the fact that local elections will eventually be held also in Mostar, a month later than in the rest of the country, on December 2020. The delay comes also from the fact that the electoral legislation modified and adopted by the BiH parliament to solve a long-lasting constitutional problem in Mostar does not include a disposition to allow the Central Commission to held elections there in less than 150 days.

The European support continues. Sometimes successfully

At the EU-Western Balkans summit, which took place in Sofia, in May 2018, the EU leaders have reconfirmed their support for the European BiH perspective, as well as for the other entities in the region. The EU leaders have agreed over the Declaration and the uppermost Agenda from Sofia, which shaped new measures to an enhanced cooperation with the region in key fields like security, rule of law and migration. However, internationally, BiH is seen as a state which must make huge efforts to accomplish the criteria on its institutions’ consolidation. Currently, they think the criteria related to the stability of institutions providing democracy, rule of law, human rights and minorities’ rights and protection, rules established by the European Council, in Copenhagen, 1993, are not fully accomplished.

Also, they think it is necessary for BiH to align its constitutional framework with the European standards and to provide the functioning of its institutions to take over the obligations established within EU. It is necessary for BiH to reform its institutions to effectively participate to making decisions within the EU and to fully apply the union’s acquis. Not least, BiH must improve its electoral framework and the functioning of the judicial system. Also, it must consolidate the prevention and counter measures of corruption and organized crime, including the money laundering and some possible terrorist actions, as well as to provide the effective functioning of the borders’ management systems, migration and asylum rights. Furthermore, it must intensify the protection of all citizens’ fundamental rights, including by providing an environment to allow the reconciliation, protection and inclusion of sensitive groups in the civil society, being also necessary to make important steps towards reforming the public administration.

In terms of economic criteria, BiH reached a certain stability, however, to go further in becoming a functional market economy, a criteria established by the European Council, in Copenhagen, in 1993, it is stated that it must pay more attention to accelerating the decision making processes and improve the business environment, as well as the effectiveness and transparency of the public field.

It is necessary to approach and eliminate the obstacles influencing the substantial bureaucracy, corruption, too complicated administrative procedures which, implicitly, need time and the division of country’s internal market. In order to cope, on long term, with the competition’s pressure, BiH must pay attention to education and its ineffective orientation towards the effective management of labor force and capital’s needs.

Also from an economic point of view, it is noteworthy that after months of political struggles between the main nationalist parties, the upper chamber of the Bosnian parliament has approved the 2020 budget - which includes funding for local elections on November 15, 2020 - the budget is set at 1.8 billion convertible BAM (approximately 900 million euro). Through this budget, 996 million BAM, are allocated for the central government and other state institutions, and the remaining 800 million for the country's external financing. Moreover, the established budget includes 42 million BAM to help fight the coronavirus pandemic and 4.2 million BAM for the delayed local elections, which will take place in October 2020.

Optimistic economic perspectives. On paper

Domestic demand and consumption were expected to be the main driver of GDP growth in BiH, according to the Economic Planning Directorate (DEP), and according to forecasts made in its 2020-2022 economic reform program, BiH's economic growth is expected to be 3.6% next year and 3.8% in 2022, given the favorable international conditions and an improved business environment. Due to the COVID-19 pandemic, it is expected to slow down between -3.2% and -5%.

Unemployment rates and social inequalities may increase, and public debt could escalate. The introduced economic policy measures are appropriate to address the challenges arising from the slowdown in key fields such as trade, services, transport and tourism. Once the situation caused by COVID-19 starts to improve, the implementation of the reform will be essential for the economy to get out of the crisis and reduce the social gaps. However, the adoption and implementation of the necessary reforms to recover from the crisis may be hampered by existing political tensions.

The increase in BiH's industrial production and construction output has led to an increase in income and exports, which along with the increase in terms of foreign exchange incomes from abroad could lead to an increase regarding the private consumption. BiH's finances are expected to get better between 2020 and 2022, as public spending will decline, while public revenues will increase, with total investment in the country expected to increase by 9% per year, on average, by 2020 -2022, while exports will increase by 7% per year.

In the defense field, in 2018, military spending in BiH increased by 26%, to a total of 221 million USD. BiH joined the UN in 1992 and contributes to UN peacekeeping operations. BiH also joined the NATO Partnership for Peace, in 2006, and is an aspiring NATO member. Moreover, BiH has signed and ratified the Arms Trade Treaty (ATT), which regulates the flow of arms across borders.

Towards a hot political autumn

Besides corruption, the political deadlock is also hampering progress in BiH, 25 years after the conclusion of the Dayton Peace Agreement (DPA). The international community must not lose sight of what is at stake in this country in the Western Balkans, as Valentin Inzko, the EU's High Representative for BiH, said during a video conference at the Security Council, on May 6, 2020. Presenting his half-yearly report on the implementation of the DPA, officially known as the General Framework Agreement for Peace in BiH, Inzko called for patience and stressed that BiH has so far avoided significant losses due to the COVID-19 outbreak, after its two entities - FBiH and RS - quickly took appropriate action, thus emphasizing the readiness and potential to work together.

In 2019, BiH saw small improvements in protecting human rights, with media freedom remaining compromised and the pace of war crimes trials becoming very slow.

According to the Organization for Security and Cooperation in Europe (OSCE), there were 109 incidents between January and September 2019, 66.67% based on religious or ethnic conflicts, and the failure of the Bosnian authorities to comprehensively assess the issue and to give them an effective answer.

Although the evolution of the general situation is not as expected, there are signs that within the Bosnian society level the division and deadlocks associated with the policy imposed on ethnic criteria are increasingly rejected. Thus, it is significant to mention here that Nasa Stranka (Our Party[4]), a new multi-ethnic political party, enjoyed unprecedented success and had good performances in the 2016 local and 2018 national elections in Sarajevo Canton, to become the partner of the dominant coalition in this administrative-territorial unit.

After having a look at the developments in BiH, one can see that ethnic tensions may pose a major real risk to the stability of this country in the Western Balkans. Fortunately, despite domestic political complications, recent threats to BiH's fragile status quo, such as the Russian interference in the 2018 elections, have not led to a dreaded outbreak of major interethnic tensions even though Russia has used a wide range of hybrid actions to maintain its influence and managed to slow down, not stop, the process of integration into European and Euro-Atlantic structures.

Although the following elections are local elections, many believe that they are always a clear indicator of the political trends that will be crucial for the next general election. It is increasingly certain that BiH citizens will go to the polls this fall, even though we are still facing effects of the COVID-19 pandemic, which affects all spheres of life, and judging by the current situation, we can state that BiH can expect a stormy end of summer and a hot political autumn.