A NEW CONFLICT IN BOSNIA-HERZEGOVINA?

by Brian Gallagher

Hrvatski Vjesnik (Australia) The New Generation English Supplement

25 October 2002

 

I recently visited the city of Mostar in Bosnia-Herzegovina (BiH). Mostar is in the Muslim (Bosniak) - Croat Federation half of BiH, and saw extensive fighting during the war, first during the Serbian attack and then in the Croat-Muslim war. The Croats are numerically outnumbered by the Bosniaks, who effectively control Federation state institutions.

What I found was a real cause for concern; a push for ethnic hegemony by the Federation government against the Croats. The Federation government is attempting to appropriate the country's most successful company, Aluminij (Aluminium) from the Croats. Disturbingly still, massive arms dumps have been discovered in Bosniak East Mostar.

I visited the Aluminij factory. Aluminij was severely damaged by the Serbs in 1992. The local Croats rebuilt the company. Currently it employs 850 people, the company is 60% owned by the workers, the government having a stake of 35%. Aluminij produces 50% of all BiH exports and has forged partnerships with companies in America and the EU such as Daimler Chrysler and Fiat and could expand. This is an incredible feat to have occurred in BiH. All the more so when one considers that the initial funding to rebuild the company came from Croatia; the government and the international community contributed nothing.

The importance to the region of Aluminij cannot be underestimated; 30,000 people are employed directly or indirectly by the company. Further, revenue for all BiH is provided by Aluminij's use of state electricity.

Incredibly, the Federation government - and certain of their international supporters - wish to put this at risk. They want to takeover the company, claiming irregularities in its privatisation, and complaining about its 'mono-ethnic' workforce, stating that non-Croat workers who lost their jobs during the war have not been re-employed. Mono-ethnic companies in BiH are as a result of the war; Aluminij is hardly unique. Other, less profitable 'mono-ethnic' employers are left alone.

Nonetheless I asked the Deputy Director of the company about this. He informed me that the company had complied with the relevant laws on the matter. Many ex-employees had found other work and therefore legally Aluminij were not obliged to take them back; this was all on file.

He also pointed out that many ex-employees - including Croats - only wanted their jobs back when it became known that Aluminij were paying the highest wages in the country rather than just after the war, when wages were rather less.

The Federation government avoids mentioning how the workforce built it up from nothing; giving the impression that a profitable company was somehow stolen from BiH in some kind of mafia scam. Independent audits have sided with the company, much to the government's displeasure. The latest audit did indeed make some criticism over the original change of ownership and made suggestions over dealing with ex-employees. But in light of all the relevant facts, it recommended the ownership structure should stay as it is; the auditors presumably realising the government's agenda to be less than honourable. International arbitration is now being advanced.

The Federation's incompetence is demonstrated by the Kuwaiti investment in a Bosniak factory in Zenica. Rather than turn it into the next Aluminij, the investment has come apart due to mismanagement - much to the fury of the Kuwaitis. Many Bosniaks may loose their livelihoods. In contrast to successful Aluminij, the government are not concerned with what has happened.

The deputy director of Aluminij gave me his opinion as to what is behind the takeover attempt; the government wish to use the profits - currently reinvested- to pay off pensioners, strikers etc. to win electoral support amongst its constituency. There can be no doubt that Aluminij would be destroyed in the event of a takeover; causing unemployment and scaring off international investors from BiH. The effect on Croat-Muslim relations would be devastating - and unpredictable.

It's no secret that the Croats are the most economically active group in BiH. It's also no secret that they do not get much international aid. Further, the international community has shown little regard for Croat views, often acting against them, such as the notorious 2000 election rule change which disadvantaged the Croats elected representatives, the Croatian Democratic Union (HDZ).

Despite all this, Aluminij has flourished and there are many small businesses in West Mostar and the rest of Croat Herzegovina, in stark contrast to the rest of the country. This also illustrates the reason for the popularity of the HDZ; why should Croats vote for the poverty inducing policies of the international community's favoured political parties?

The international community often justify their actions by dubious claims that Croat areas are mafia dominated and run; if true, the mafia are doing a rather better job than the federation government or the international community in producing economic growth!

Recently, NATO found a massive quantity of arms in Bosniak East Mostar in various locations, including factories. The weapons included approximately 10,000 mortars, illegally produced since the war. The Federation government - put in place by the international community in 2000 - obstructed the investigation into the matter. There are suggestions that Bosniak leaders have some involvement with the arms stockpiles. It seems that some people have different ideas about the uses of factories than the Aluminij workforce.

Paddy needs to deal swiftly with the conflict in the Federation. He has identified both creating a good business climate and dealing with terrorism as priorities. Paddy should visit Aluminij at once and lend the company his support; the deputy director of Aluminij informed me that Paddy is welcome to visit at any time. This would help reassure both the Croats and international investors in BiH. Paddy would do well to examine the reasons for Aluminij's success, and replicate it throughout BiH.

If Paddy is serious on terrorism he will need to deal firmly with the arms issue - no matter who it embarrasses.

A spot of devolution and decentralisation is also required. Power needs to taken away from Sarajevo and given to local communities. It could take the heat out of the current situation. It should also be done in centralised -and ethnically pure - Republika Srpska; it would help refugees return if they knew they could exercise power at a local level.

Longer term, the Croats need an institutional stake in BiH; the current situation is simply not sustainable, especially if Croats continue to produce the most wealth. Croats will not want to subsidise the moribund BiH state, and it would help prevent the rest of the country exploiting them. For BiH to survive, it needs to reach a point where none of the three nationalities have power over each other.

For the moment, the current political conflict between Croats and Bosniaks is a very real problem which could escalate. Paddy needs to resolve it, and soon.

 

The above article, written exclusively for 'The New Generation' by Brian Gallagher, was written prior to the October elections in Bosnia-Herzegovina.

© Brian Gallagher