Bosnia is still without a government, despite parliamentary elections having taken place in October 2011,with the country showing few promising signs of resolving the stalemate. This in turn has resulted in a succession of short-term fixes and emergency measures to secure funding for the budget and support funds from the EU. BMI warns that not only does the government face a potential funding crisis, but continued stalemate could subordinate long-term policy planning to near-term survival objectives. Indeed, a NATO Parliamentary Assembly delegation expressed its disappointment in the country's leadership and its failure to build consensus on an executive and state budget.
BiH's formation of a new government, and therefore continued reform of and spending on defence, remains paralysed in late-2011. Apart from defence reforms and budgeting, the country's political class has been unable to form a consensus on the location of Ministry of Defence property (Republika Srpska argues that this should only involve property belonging to both BiH's two political entities).
Meanwhile, the EU is planning to slash its troop numbers in the country from around 1,300 to 500-600; this was agreed by foreign ministers in October 2011. Although the EU claims that the reduction in size does not imply a change to the mission's recourse to military action, should this recoursebe necessary, it does significantly reduce its operational capacity. The move also ushers in a change regarding the mission's focus, to one of training, capacity-building and situational awareness, according to a ministers meeting in Luxembourg. Security was almost breached in a rare incident at the US embassy in Sarajevo in late October 2011, which saw at least one militant fire a weapon at the building. Although a US State Department spokesman claimed that no embassy staff were hurt, some reports claimed that a security guard, police officer and several others were hurt in the attack. Some reports also claimed that the gunman, who is said to have shouted "Allahu Akbar" ("God is Great"), was accompanied with by a person appearing to carrying explosives. However, Bosnian police managed to shoot and injure the attacker. The Bosnian Serb military leader General Ratko Mladic, whose charges include the massacre of 8,000 Bosnian Muslims in Srebrenica in 1995, was finally captured in May 2011, after 16 years as a fugitive.
The move recalls tensions including RS president Milorad Dodik's rejection of the Srebrenica massacre as genocide. Similar tensions were highlighted when the tribunal sentenced former Yugoslav army head Momcilo Perisic to 27 years imprisonment for his alleged part in the Srebrenica killings. Perisic's ruling was significant, as it was the first sentencing over the Srebrenica killings at the tribunal (Slobodan Milosovic was expected to be the first, until he died in detention in 2006). The tribunal had prosecuted around 160 cases by mid-2011, with around two-thirds involving law-enforcement, army or political individuals with Serb or Bosnian Serb backgrounds. Such cases, along with the ethnic distribution of prosecutions, serve as a reminder that the ICTY still holds the ability to destabilise BiH, both internally and externally.
The Bosnian economy is still in the throes of recovery, buoyed by a resurgent industrial sector. With real wage growth returning to positive territory, we also expect consumer spending to pick up this year. That said, there are a number of significant downside risks to our projection, including poor local harvests, rising inflationary pressures and weak investor confidence, owing to the domestic political impasse and eurozone sovereign debt crisis.
Click for Report details:Bosnia-Herzegovina Defence and Security Report Q1 2012
