chapter  5
22 Pages


Introduction The war in Bosnia between 1991 and 1995 was one of the series of conflicts that resulted from the demise of federal Yugoslavia. It resulted in around 250,000 deaths and displaced as much as half of the country’s population. Although one of a number of vicious conflicts taking place at the time, atrocities such as the Srebrenica massacre of 1995 and the devastation of Sarajevo – the host of the Winter Olympics just a decade before – made the Bosnian war one of the most notorious of recent decades. The record of the international community in the conflict was decidedly mixed. On the one hand, it was the failure of Dutch troops to defend one of the UN-designated ‘safe areas’ that allowed the Srebrenica massacre to happen. On the other, it was the North Atlantic Treaty Organization (NATO) bombing campaign, triggered by a mortar attack by Bosnian Serb forces on the market place in Sarajevo, which arguably brought the Serbian protagonists to the negotiating table.1 The General Framework Agreement for Peace in Bosnia and Herzegovina was formally signed in Paris in December 1995. The agreement is better known by the name which derives from where negotiations took place as the Dayton Accords. Whilst these accords undoubtedly brought a lasting peace – there has been no significant re-emergence of the conflict – the Dayton agreement has proved highly problematic as the basis for building a durable state. In effect what the agreement did was create a state with an internal divide where the front line of the war had been. The Dayton political structures positively encourage ethnic grandstanding by the country’s politicians, and the process often results in deadlock and stalemate. Moreover, the Dayton structures are incredibly complex. As well as the federal state, Bosnia Herzegovina, there are two so-called Entities, Republika Srbska, and the Bosniak-Croat Federation of Bosnia and Herzegovina. The latter is then broken down into ten separate cantons. The result, as the ICG point out, is ‘181 ministers for 3.7 million people.’2 The international community’s solution to this impasse has been to use the so-called Bonn powers to push decisions through. Whilst these powers have kept the reconstruction process moving, they have been strongly criticised – Chandler accuses the international community of ‘running the country with little purpose or legitimacy.’3 In his

view, and that of other commentators, progress has been achieved only at the cost of developing robust local structures of governance. Although significant progress has undoubtedly been made since 1995, there is a widespread recognition that the Dayton structures need to change significantly if Bosnia is to develop as a stable, durable state. Many of those interviewed for this study saw the Stabilisation and Association Agreement (SAA) signed with the EU in 2008 as a vehicle for this, although an EU report in late 2009 suggested little grounds for optimism, stating that ‘the country’s progress in addressing key reforms has remained very limited.’4 Within this context, the levels of FDI in Bosnia remain low, even by comparison with other countries in the immediate region. What Buiter describes as a ‘dreadful business and investment climate’5 together with the complexities resulting from the political structures seem to have deterred potential investors. However, a number of MNCs do operate in Bosnia Herzegovina (BiH), including service companies like DHL and Hewlett Packard (HP), banks, and some industrial firms such as ArcelorMittal. Although relatively small, the international private sector in Bosnia has had material effects on the reconstruction process, as this chapter will demonstrate. However, as will also be shown, there is virtually no ‘joined up thinking’ which seeks to align the corporate impacts with those of the wider reconstruction process.