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Crooks, fools and optimists

Discussions of Bosnia tend to rehash a relatively few themes:  how the Dayton agreements are flawed, whether the High Representative is still needed, how Bosnians should be preparing the country for European Union membership, what threats of violence and war remain.

Those issues came up at yesterday’s discussion of the Bosnian economy at SAIS’s Center for Transatlantic Relations) with the State Department’s Jennifer Brush, Sarajevo beer magnate Mujo Selimović, the World Bank’s Marco Mantovanelli, former Republika Srpska Finance Minister Svetlana Cenić and Bosnian diaspora entrepreneur Edin Saračević. But the discussion, chaired by Mike Haltzel, focused mainly on the economy and how to fix it.

The bad news.  The panel agreed that international funding of the public sector in Bosnia suffers large losses to government corruption.  Bosnia is not a good place to start a business, or stay in one. There is a real, even if small, risk of serious violence that would disrupt the economy (including repayment of loans, which some debtors would welcome) and partition the country.

The good news.  But the country has a good pre-war business history, when several Bosnian companies became world-class competitors.  And there are ample opportunities in post-war Bosnia to get a good return on investment:  hydro power, organic food production, information technology. The labor force learns quickly and thoroughly.  The well-educated, successful diaspora can be helpful–some may return, others may help with international marketing of Bosnian good and services.  Few of them care much about ethnic divisions.

Foreign investors are looking for stability, which NATO membership would certify, and improved local institutions, in particular for rule of law.  Political divisiveness and lack of a unified economic space are drags on the economy.

What Bosnia needs is to shift from an economic model based on internationally financed domestic consumption to one based on investment and private sector exports. International budget support to the various levels of Bosnian government is no longer appropriate, unless there is a serious risk of systemic failure.  The international financial institutions (IFIs) should be shifting to private sector loans, leaving the governments to obtain financing from taxpayers and focusing IFI efforts on export-oriented entrepreneurs. They in turn will mobilize ordinary Bosnians, who are tired of the “techno-beat” of ethnic identity (Serb, Croat, Muslim, Serb, Croat, Muslim) and interested in pursuing jobs and improved living conditions.

It was suggested that Bosnia divides people among crooks, fools and optimists.  I don’t count myself a crook and I am certainly not an optimist, so I guess I must be a fool.  But if I were in charge I would shut off the tap of money flowing from the internationals to Bosnian governments and get it moving in the private sector direction.  Let the governments get their money from taxes, and suffer the accountability that follows from that.

Patriotism, not treason

I surprised a Kosovar visitor this morning with an idea I thought I had published long ago but now can’t find on peacefare:  Pristina should be represented in Belgrade.  So if I have already mentioned it, please excuse the repetition.

If not, here is my thinking.

I would never want to negotiate with a foreign state in whose capital I am not represented.  Why?  Because it is important to understand the political dynamics there.  Even if we are the direst of enemies, there will be a range of political views, with some leaning more in directions I might find useful than others. Having a representative there will help me to understand at least this much:  how not to strengthen my enemies.  I might even find some allies, especially if I couch my desires in the right terms.

Take Belgrade, for example.  Most of the Serbian political spectrum is rock solid in public in wanting sovereignty over Kosovo.  There are some who openly disavow that goal, but many more who realize it is not compatible with Serbia’s own ambitions to join the European Union.  It is in part a matter of priorities:  Serbia has limited resources (especially financial) and needs to limit its commitments.  That is why it concurred in Kosovo joining the IMF and World Bank, enabling Serbia to get out from under the obligation to pay some arrears.  There are today lots of people in Belgrade who would like more transparency and accountability for Serbia’s subsidies to Serbs in Kosovo.  Which is what Pristina should want too.  So screaming foul about the subsidies is likely not going to be as effective as calling for transparency and accountability, an objective at least some in Belgrade share.

But would Belgrade agree to Kosovo representation?  I don’t know.  But I do know that Serbia maintains state institutions inside Kosovo.  Reciprocity is the heart of state-to-state relations:  if Kosovo regards itself as sovereign and independent, it should ask for representation inside Serbia.

Of course Serbia may say “no,” since it does not regard Kosovo as sovereign and independent.  Pristina can’t evict the Serbian institutions, because they are located in the Belgrade-controlled north.  A better course would be to accept an unofficial office in Belgrade, one opened by a Kosovar nongovernmental organization.  The head would need to be an Albanian who speaks native Serbian and can appear publicly and informally as a spokesman and defender of the Kosovo institutions, just as the Serbian institutions in north Kosovo do for Belgrade.

Belgrade might want that non-office office to be located outside the capital.  That’s fine:  it should then be in the Albanian-majority Presevo valley.  Belgrade won’t like that, but if it refuses, it embarrasses itself.

The real problem with this idea is not Belgrade’s attitude–which we don’t know yet–but rather the Albanians.  I am reliably told that it would be hard to find someone to go to Belgrade, since that would be regarded as treasonous.  This is of course absurd:  representing your country in a hostile capital is patriotism, not treason.