Something is rotten

I had the satisfaction yesterday of sending around yesterday a paper (now available in the local language) by Srdjan Blagovcanin and Boris Divjak on How Bosnia’s Political Economy Holds It Back and What To Do About It. They have done something I have wanted to see for some time: a chapter and verse description of how politicians are ripping off the country’s citizens. They can’t of course name names, but they cite specific instances and elucidate the mechanisms used. The responsible parties know who they are. So does everyone else in Bosnia and Herzegovina.

This paper should be read with the German/British initiative for “reform” in mind. That effort blocked a nascent American initiative to try once again to fix the Dayton constitution, which empowers ethnic nationalists and enables the rip-off. The Germans and British have convinced the European Union to focus initially on labor market reforms, in order to generate growth and presumably in preparation for privatization of state-owned companies. I’m not against it, but there are two obvious problems with that approach:

1. Serious labor market reform will worsen social conditions, and privatization will eventually lead to redundancies that will worsen them more;
2. Past privatization efforts have put state assets into the hands of crony capitalists, who manage not only to strip assets but also sell the shells back to the state.

It is only by acute awareness of the political/economic context and close international supervision that such perversities can be avoided. But it is definitely time to move ahead with serious reform efforts. Some political leaders are blatantly ripping off the citizens and enriching themselves. Citizens get little or nothing in the way of state services. I only ask that the Europeans not settle for Potemkin villages. It is time to build a state in Bosnia that serves the real needs of its citizens.

How do we get there from here? Srdjan and Boris suggest starting where the problems are: in the political parties and their leadership. They want internal democracy in the parties, which today are controlled by their leadership, without any serious input from the membership. In Italy this is called “partitocracy.” It isn’t any prettier in the Balkans. They also want to see red tape cut and serious judicial efforts mounted against corruption, including international asset freezes and travel bans for guilty parties, who should be pursued by the judicial system with international assistance. They are attentive also to the need for a broader civil society effort to create a context in which corrupt practices are not tolerated.

None of this in my way of thinking substitutes for constitutional reform, which however has failed at least twice (I am counting the close-call 2006 April package as well as the ill-begotten 2009 Butmir initiative), despite high-level international engagement. The EU is now very much in the lead in Bosnia, with the Dayton-created High Representative taking a backseat. Boris and Srjdan like it that way, as does Brussels. And Brussels is following the British/German lead. So constitional reform, essential though it may be, will have to wait a while.

If the current reform effort does anything useful, it shouldn’t have to wait long. Once the political economy in Bosnia is reconstructed and citizens can begin to expect some services, they won’t long put up with the ethnic nationalists who have stood in the way of progress for 20 years. I won’t hold my breath for that to happen, but we’ll know soon enough.

If the current reform effort fails, the country will return to demands for constitutional changes. I only hope they will be in the direction of strengthening the state government and its ability to negotiate and implement the requirements of EU membership. The route Milorad Dodik prefers–towards partition–is one that would set Bosnia back to wartime issues and block its road to the EU. That’s not the way to go.