Bureau of European and Eurasian Affairs
November 18, 2005
U.S. Assistance to Bosnia and Herzegovina - Fiscal Years 1995-2005
In support of implementation of the Dayton Accords, the U.S. Government has provided over $1.354 billion in bilateral assistance since 1995. From 1996 to 1998, U.S. contributions totaled nearly a quarter of a billion dollars annually in an effort to kick-start reconstruction and spur economic growth. Minority reintegration, infrastructure repair, and loans to restart businesses were also cornerstones activities in the early years.
More recently, from 2003 to 2005, bilateral assistance has exceeded $50 million annually. U.S. efforts in this period focus on deepening economic reform; strengthening Bosnia and Herzegovina’s institutions for democracy and governance, including rule of law institutions; and building a viable state prepared to join Euro-Atlantic institutions.
Infrastructure Improvement and Business Development: Beginning in 1995, infrastructure programs targeted structures that would help restart businesses and assist citizens to return to normal living. Over 1,600 infrastructure repair projects were completed, including the repair of rail and border bridges connecting Croatia to Bosnia and Herzegovina. A Business Development Program provided loans to help businesses restart operations. In its first seven years, 600 loans helped small and medium size enterprises. Reflows from this program have funded other activities such as deposit insurance, public sector accounting, agricultural production, and bank supervision.
Minority Reintegration: By 1998, the focus of international programs shifted from general infrastructure to efforts encouraging return of minority populations displaced during the war. The repair of water systems, schools, health clinics, roads and power infrastructure and the provision of small loans facilitated the return of over one million refugees and internally displaced persons, or about half of all persons displaced by the war, to their prewar homes. Many of these people returned to areas where they are the minority ethnic group. Additional U.S. funding has helped to identify nearly half of the war-time missing through DNA technology.
Fiscal and Financial Sector Reform: Since 1995, Bosnia and Herzegovina’s GDP tripled and merchandise exports have increased tenfold; inflation rates have been held to below one percent over the past three years. U.S. assistance activities have helped Bosnia and Herzegovina create a Central Bank and introduce a single currency pegged to the Euro. The commercial banking system was privatized and has attracted substantial foreign investment. In January 2006, Bosnia and Herzegovina will introduce a state-level value added tax.
Development of State Institutions: U.S. assistance and expertise have enabled Bosnia and Herzegovina to establish a state-level Ministry of Defense, a national law enforcement agency, a single, unified intelligence service, a state border service, a customs service, a tax agency, a Central Bank, and a Deposit Insurance Agency, among many others institutions.
Rule of Law: U.S. assistance has contributed to the establishment of several key state-level judicial and prosecutorial bodies, including the State Prosecutor’s Office and the State Court. The State Court contains special chambers for Organized Crime and War Crimes. Bosnia and Herzegovina has now been deemed ready by the International Criminal Tribunal for the Former Yugoslavia (ICTY) to hear war crimes cases in its domestic chamber and the first indictee has been turned over to the Bosnian court. Over 10,000 police officers at the state, entity, and local levels have been trained in modern policing methods and human rights.
Democratic Elections, NGOs, and an Independent Media: Bosnia and Herzegovina has held several successful, free and fair national and sub-state elections. In 2005, municipal elections were fully administered and funded by the government of Bosnia and Herzegovina; also in 2005, mayors were directly elected for the first time, substantially empowering municipalities and enhancing democracy. For the past five years, U.S. assistance supported Bosnia and Herzegovina’s NGO community by helping improve their administration and sustainability. U.S. assistance has also strengthened local broadcasters and trained a majority of local journalists. The media in Bosnia and Herzegovina now expresses a wide range of political opinions, and a Communications Regulatory Agency, much like the FCC, is in place to monitor the media.