Bosnia: Behind the Democratic
by Michael Chossudovsky
from the Internet
What's behind the dismantling of former
Yugoslavia and the recolonizing of Bosnia? According to conventional
opinion, it is the inevitable result of deep-seated ethnic tensions
rooted in history. :But, as Michel Chossudovsky argues, the real
roots of the conflict lie in the historic meddling of Western
imperialism -- and Bosnia's future is now firmly in the hands
of Western finance capital.
As heavily-armed NATO troops enforce the
peace in Bosnia, the press and politicians alike portray Western
intervention in the former Yugoslavia as a noble, if agonizingly
belated, response to an outbreak of ethnic massacres and human
rights violations. In the wake of the November 1995 Dayton Peace
Accords, the West is eager to touch up its self-portrait as saviour
of the Southern Slavs and get on with "the work of rebuilding"
the newly sovereign states.
But following a pattern set since the
onslaught of the civil war, Western public opinion has been misled.
The conventional wisdom, exemplified by the writings of former
US Ambassador to Yugoslavia Robert Zimmermann, is that the plight
of the Balkans is the outcome of an "aggressive nationalism",
the inevitable result of deep-seated ethnic and religious tensions
rooted in history.
Drowned in the barrage of images and self-serving
analyses are the economic and social causes of the conflict. The
deep-seated economic crisis which preceded the civil war has long
been forgotten. The strategic interests of Germany and the US
in laying the groundwork for the disintegration of Yugoslavia
go unmentioned, as does the role of external creditors and international
financial institutions. In the eyes of the global media, Western
powers bear no responsibility for the impoverishment and destruction
of a nation of 24 million people.
But through their domination of the global
financial system, the Western powers, pursuing their collective
and individual "strategic interests" helped from the
beginning of the 1980s to bring the Yugoslav economy to its knees,
contributing to stirring simmering ethnic and social conflicts.
Now, the efforts of the international financial community are
channeled towards "helping Yugoslavia's war-ravaged successor
states. " Yet while the world's attention is focused on troop
movements and cease fires, creditors and international financial
institutions are busy at work collecting former Yugoslavia's external
debt, while transforming the Balkans into a safe-haven for free
The former Yugoslavia has been carved
up under the close scrutiny of its external creditors. Its foreign
debt has been carefully divided and allocated to the republics.
The privatization programs implemented under the supervision of
the donors, have contributed to a further stage of economic dislocation
and impoverishment of the population. GDP had declined by as much
as 50 percent in four years ( 1990-93).
Moreover, the leaders of the newly sovereign
states have fully collaborated with the creditors. Even as the
fighting raged, Croatia, Slovenia and Macedonia had entered into
separate loan negotiations with the Bretton Woods institutions.
In Croatia, the government of President Franjo Tudjman signed,
in 1993, an agreement with the IMF. Massive budget cuts mandated
under the agreement thwarted Croatia's efforts to mobilize its
own productive resources, thus jeopardizing post-war reconstruction.
The cost of rebuilding Croatia's war-torn economy was estimated
at some $23 billion, requiring an influx of fresh foreign loans.
In the absence of "debt forgiveness," Zagreb's debt
burden will be fueled well into the 21 st Century.
With a Bosnian peace settlement apparently
holding under NATO guns, the West has unveiled a "reconstruction"
program which fully strips Bosnia-Herzegovina of its economic
and political sovereignty. This program largely consists in developing
Bosnia-Herzegovina as a divided territory under NATO military
occupation and Western administration.
Resting on the November 1995 Dayton accords,
the US and the European Union have installed a full-fledged colonial
administration in Bosnia. At its head is their appointed High
Representative (HR) Mr. Carl Bildt, a former Swedish Prime Minister
and European Representative in the Bosnian Peace negotiations.
The HR has full executive powers in all civilian matters, with
the right to overrule the governments of both the Bosnian Federation
and the Bosnian-Serb Republika Srpska. The HR is to act in close
liaison with the IFOR Military High Command as well with donors
An international civilian police force
is under the custody of an expatriate Commissioner appointed by
the United Nations Secretary General Mr. Boutros Boutros Ghali,
some 1,700 policemen from fifteen countries most of whom have
never set foot in the Balkans, were dispatched to Bosnia after
a five days training program in Zagreb.
While the West has underscored its support
to democracy, the Parliamentary Assembly set up under the "Constitution"
finalized under the Dayton Accords, largely acts as a "rubber
stamp". Behind the democratic facade, actual political power
rests in the hands of a "parallel government" headed
by the High Representative and staffed by expatriate advisors.
Moreover, the Constitution agreed in Dayton
hands over the reins of economic policy to the Bretton Woods institutions
and the London based European Bank for Reconstruction and Development
(EBRD). Article VII stipulates that the first Governor of the
Central Bank of Bosnia and Herzegovina is to be appointed by the
IMF and "shall not be a citizen of Bosnia and Herzegovina
or a neighbouring State. "
Just as the Governor of the Central Bank
is an IMF appointee, the Central Bank will not be allowed under
the Constitution to function as a Central Bank. Neither will the
new "sovereign" successor State be allowed to have its
own currency (issuing paper money only when there is full foreign
exchange backing), nor permitted to mobilize its internal resources.
As in the other successor republics, its ability to self-finance
its reconstruction (without massively increasing its external
debt) is blunted from the outset.
The tasks of managing the Bosnian economy
have been carefully divided among donor agencies: while the Central
Bank is under IMF custody, the European Bank for Reconstruction
and Development (EBRD) heads the Commission on Public Corporations
which supervises operations of all public sector enterprises including
energy, water, postal services, roads, railways, etc. The President
of the EBRD appoints the Chairman of the Commission which also
oversees public sector restructuring, meaning primarily the sell-off
of State and socially owned assets and the procurement of long
term investment funds.
One cannot sidestep a fundamental question:
is the Bosnian Constitution formally agreed between heads of State
at Dayton really a constitution? A sombre and dangerous precedent
has been set in the history of international relations: Western
creditors have embedded their interests in a Constitution hastily
written on their behalf, executive positions within the Bosnian
State system are to be held by non-citizens who are appointees
of Western financial institutions. No constitutional assembly,
no consultations with citizens' organizations in Bosnia and Herzegovina,
no "constitutional amendments".
The Bosnian government estimates that
reconstruction costs will reach $47 billion. Western donors have
pledged $3 billion in reconstruction loans, yet only a meagre
$518 million dollars were granted in December 1995, part of which
is tagged (under the terms of the Dayton Peace Accords) to finance
some of the local civilian costs of the Implementation Force's
(IFOR) military deployment as well as repay debt arrears with
Western governments and corporations show
greater interest in gaining access to potential strategic natural
resources than committing resources for rebuilding Bosnia. Documents
in the hands of Croatia and the Bosnian Serbs indicate that coal
and oil deposits have been identified on the eastern slope of
the Dinarides Thrust, a region retaken from rebel Bosnian Krajina
Serbs by the Croatian army in the final offensives before the
Dayton Peace accords.
Bosnian officials report that Chicago-based
Amoco was among several foreign firms that subsequently initiated
exploratory surveys in Bosnia. The West is anxious to develop
these regions. Moreover, there are also "substantial petroleum
fields in the Serb-held part of Croatia just across the Sava river
from the Tuzla region". The latter under the Dayton Agreement,
is part of the US Military Division with headquarters in Tuzla.
The territorial partition of Bosnia between
the Federation of Bosnia-Herzegovina and the Bosnian-Serb Republika
Srpska under the Dayton Accords thus takes on strategic importance,
the 60,000 NATO troops on hand to "enforce the peace"
will administer the territorial partition of Bosnia-Herzegovina
in accordance with Western economic interests.
National sovereignty is derogated, the
future of Bosnia will be decided upon in Washington, Bonn and
Brussels rather than in Sarajevo. The process of "reconstruction"
based on debt rescheduling is more likely to plunge Bosnia-Herzegovina
(as well as the other remnant republics of former Yugoslavia)
into the status of a Third World country.
While local leaders and Western interests
share the spoils of the former Yugoslav economy, the fragmentation
of the national territory and the entrenching of socio-ethnic
divisions in the structure of partition serve as a bulwark blocking
a united resistance of Yugoslavs of all ethnic origins against
the recolonization of their homeland.
Macro-economic restructuring applied in
Yugoslavia under the neoliberal policy agenda has unequivocally
contributed to the destruction of an entire country. Yet since
the onset of war in 1991, the central role of macro-economic reform
has been carefully overlooked and denied by the global media.
The "free market" has been presented as the solution,
the basis for rebuilding a war-shattered economy.
A detailed diary of the war and of the
"peace-making" process has been presented by the mainstream
press. The social and political impact of economic restructuring
in Yugoslavia has been carefully erased from our social consciousness
and collective understanding of "what actually happened".
Cultural, ethnic and religious divisions are highlighted, presented
dogmatically as the sole cause of the crisis when in reality they
are the consequence of a much deeper process of economic and political
fracturing. This "false consciousness" has invaded all
spheres of critical debate and discussion. It not only masks the
truth, it also prevents us from acknowledging precise historical
occurrences. Ultimately it distorts the true sources of social
The ruin of an economic system, including
the take-over of productive assets, the extension of markets and
"the scramble for territory" in the Balkans constitute
the real cause of conflict. What is at stake in Yugoslavia are
the lives of millions of people. Macro-economic reform destroys
their livelihood, derogates their right to work, their food and
shelter, their culture and national identity... Borders are redefined,
the entire legal system is overhauled, the socially owned enterprises
are steered into bankruptcy, the financial and banking system
is dismantled, social programs and institutions are torn down.
Yugoslavia is a "mirror" of
similar economic restructuring programs applied not only in the
developing World but also in recent years in the US, Canada and
Western Europe. "Strong economic medicine" is the answer,
throughout the World, people are led to believe that there is
no other solution: enterprises must be closed down, workers must
be laid off and social programs must be slashed... It is in the
foregoing context that the economic crisis in Yugoslavia should
be understood. Pushed to the extreme, the reforms in Yugoslavia
are the cruel reflection of a destructive "economic model"
imposed under the neoliberal agenda on national societies throughout
Michel Chossudovsky is a professor in
the Department of Economics, University of Ottawa. This article
is excerpted from a longer piece which is available from the author,
who can be reached by fax at (613) 789-2050 or by e-mail at email@example.com
from the Internet at www. web.net/~newsoc/3/Bosnia.html
International War Crimes