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Bosnia and Herzegovina's declaration of sovereignty in October 1991, was followed by a referendum for independence from the former Yugoslavia in February 1992. The Bosnian Serbs - supported by neighboring Serbia - responded with armed resistance aimed at partitioning the republic along ethnic lines and joining Serb-held areas to form a "greater Serbia." In March 1994, Bosniaks and Croats reduced the number of warring factions from three to two by signing an agreement creating a joint Bosniak/Croat Federation of Bosnia and Herzegovina. On 21 November 1995, in Dayton, Ohio, the warring parties signed a peace agreement that brought to a halt the three years of interethnic civil strife (the final agreement was signed in Paris on 14 December 1995). The Dayton Agreement retained Bosnia and Herzegovina's international boundaries and created a joint multi-ethnic and democratic government. This national government is charged with conducting foreign, economic, and fiscal policy. Also recognized was a second tier of government comprised of two entities roughly equal in size: the Bosniak/Croat Federation of Bosnia and Herzegovina and the Bosnian Serb-led Republika Srpska (RS). The Federation and RS governments are charged with overseeing internal functions. In 1995-96, a NATO-led international peacekeeping force (IFOR) of 60,000 troops served in Bosnia to implement and monitor the military aspects of the agreement. IFOR was succeeded by a smaller, NATO-led Stabilization Force (SFOR) whose mission is to deter renewed hostilities. SFOR remains in place at a level of approximately 21,000 troops.

Update No: 063 - (23/07/02)

Ashdown to the fore
Since May the International High Representative in Sarajevo, overseeing the whole of Bosnia-Herzegovina, has been Paddy Ashdown, former leader of the Liberal Democrats in the UK and a former commando. His job is not unlike that of a colonial governor with the ability to dismiss presidents and premiers in the constituent republics.
The international community has after all been providing the stability and the finance, in the one case with an 18,000-strong force and in the other some US$5bn in aid and credit since the 1995 Dayton Agreement. 
Ashdown's appointment was doubtless helped by the widespread perception of the British as experienced colonial rulers. Also, since the break-up of the Former Yugoslav Republic, he made many tours of inspection as a party leader and since the inception of Tony Blair as P.M. as his personal emissary on the many conflicts. This enabled him to give evidence in the prosecution of Milosevic at the Hague. Ashdown is not himself experienced in ruling, never having come to power in the UK. But he is proving an effective communicator all the same, which he was as a political leader, his party's fortunes picking up. He was in constant touch with Premier Blair, who nominated him for the post.
He enunciated his philosophy on assumption of office: "I want the office of the high representative to be open and accessible… So starting today, I will be spending more time out of Sarajevo, meeting people from across the country and hearing their views." This is precisely what he has done, holding "town hall" meetings around the country and debating with local dignitaries. He urges that "we need to give citizens a real voice." He wants to be seen not as an interfering busybody from outside but as a popular tribune, "a servant of Bosnia and Herzegovina."
Far from being biased towards politicians, he thinks that there are too many of them in Bosnia. "We need to worry less about constitutions…. We need to spend less time talking to politicians and more time talking to teachers, judges, businessmen and returnees."
He sees himself in certain respects as a champion of the people against the politicals. Indeed he has sacked the deputy premier of the Muslim - Croat Federation, Nikola Cuabovac, and forced the resignation of the Serb Republican Finance Minister, Milenko Vrakar, with the media speculating that more dismissals are to come.
There is a risk here that local politicians, representing different ethnic interests, Muslim, Croat ex Serb, will become administrators of international decrees. A resolution of interests by give and take within existing supra-ethnic institutions would appear to be the way forward. Politics does have a role to play, being the medium for dialogue and compromise among different ethnic groups with their own legitimate concerns.
Ashdown has certainly done one thing, that is to impose his own stamp upon the governance of this country, as tricky a job as any in Europe. But at least one thing appears to be have been done. Violence is no longer the way, which cannot be said of Afghanistan.

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Volkswagen resumes production in Bosnia

The biggest German car manufacturer, Volkswagen, resumed its production in Bosnia-Herzegovina at the beginning of July. The Sarajevo-based factory, Unis, is due to produce about 1,000 Golf A4s annually for Volkswagen, continuing a 30-year cooperation between the two companies, which had been interrupted by the 1992-95 war in Bosnia-Herzegovina.
The cars produced at the Sarajevo factory are intended for the southeast European market. By using the Sarajevo factory, Volkswagen also hopes to increase their market share in the region and raise consumer interest in the Golf V, the follow-up model to the Golf A4 to be introduced in 2004, VW says.
VW Golfs produced in Sarajevo were more affordable to Bosnian citizens that VWs imported from Germany. Volkswagen current owns 58 per cent of Unis, while the rest is held by private Bosnian firms. Previous VW vehicles produced in Sarajevo are the Beatle, Golf I and Golf II. 

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Bosnian Serb aviation factory buys shares of French company

The Bosnian Serb aviation factory, Orao, has signed an agreement with French company, Meca 31, for 49,500 euros and Orao is expected to invest further 300,000 euros in joint projects by the end of the year. After the agreement was signed, Milan Prica said that it was the basis for the factory to start its transition from military to civil production, the Federation News Agency has reported.
The French company has a certificate for aviation production and a significant network of regular buyers.
Prica pointed out that contracts amounting to 150,000 euros were already in the pipeline and that their implementation would start as soon as the agreement was signed, adding that by this business move, Orao would ensure the increase in production and overhaul capacities, training of personnel and the joint participation in the European and world markets...
The Bosnian Serb Republic defence minister, Slobodan Bilic, who attended the signing of the agreement, said that the move was one of the first results of a long-standing effort to revive the Serb Republic aviation industry.

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International group to build Bosnian gas pipeline 

The Bosnian Serb government has signed a 30-year concession contract with an international consortium for the construction of a 456 km (283 miles) natural gas pipeline worth US$110m, Reuters has reported. 
The Slavian International consortium, made up of Swiss, Russian and Bosnian Serb capital, was declared winner of the international tender advertised last September, said Bosnian Serb Minister of Energy and Mining Bosko Lemez. 
The pipeline would run from Zvornik, in the east of the Serb Republic on the border with Yugoslavia, to the western part of the entity, which has shared Bosnia with a Muslim-Croat federation since the 1992-5 war. Gazexport, the export arm of Russia's Gazprom, transports natural gas from Russia via Hungary and Yugoslavia to central parts of Bosnia. 

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Bosnian Serb Treasury collects more revenue than planned

In the first six months of this year the Bosnian Serb Republic Treasury has collected revenue to the tune of 402m convertible marks [KM], which is 3 per cent more than planned, the Assistant Finance Minister in charge of the Treasury, Zarko Mionic, said on 8th July, Federation News Agency has reported. 
According to him, the salaries of the state employees have been paid up to and including May, but the funds for the judicial institutions and the Defence Ministry have not been secured yet. The funds for the salaries of the people working for science and culture institutions were secured.

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World Bank grants US$30m loan to Bosnia to improve infrastructure

Bosnia-Herzegovina and the World Bank (WB) signed on 18th June a US$30m development credit on the operation and safety of roads, approved under the International Development Agency (IDA) terms, the Bosnian Onasa web site has reported. Bosnia-Herzegovina Foreign Trade Minister, Azra Hadziahmetovic, and WB Director to Bosnia-Herzegovina ,Joseph Ingram, signed the agreement. 
Out of the total credit, one-third belongs to the Republika Srpska [Bosnian Serb Republic] and two-thirds belong to the Federation of Bosnia-Herzegovina. 
The credit will be fulfilled in the next five years for improving the road network and will be co-financed by the entity government with additional KM [convertible marks] 23m. 
Hadziahmetovic said after the signing that roads and other infrastructure are a key precondition for economic growth, because they create conditions for increasing business activities. "The project's realisation will benefit to the engagement of local construction companies," she added. 
The Bosnia-Herzegovina minister stressed an important component of the project is setting up a Public Corporation for Roads at the state level, which will be competent to bring common standards for the construction of roads and capable to assess terms for concessions for roads construction. 
"The Bosnia-Herzegovina government wants to attract a larger number of foreign investors. Also a number of local construction firms will gain jobs on building and repairing roads in Bosnia-Herzegovina, while the jobs will enable private investments of local businessmen," Ingram said. 
"The WB was a reliable partner in facilitating transport infrastructure through two preliminary projects, totalling US$74m. Our cooperation in the sector resumes with the new agreement," Hadziahmetovic concluded.

Bosnia, EU sign aid agreement worth 71.9m euros 

Chairman of the Bosnia-Herzegovina Council of Ministers, Dragan Mikerevic, and head of the European Commission delegation in Bosnia-Herzegovina, Hansjoerg Kretschmer, on 28th June signed an agreement on priorities to be financed in Bosnia-Herzegovina from the EU's programme for this year, amounting to 71.9m euros, Onasa news agency web site has reported.
According to the signed action programme CARDS 2002, the EU assistance for Bosnia-Herzegovina will this year be directed to the areas of democratic stabilization, building of administration capacities, economic and social development, environmental protection and natural resources, as well as consolidation of the judiciary and internal affairs. 
In the field of democratic stabilization, 23.5m euros will be used for stimulation of the return process, meaning reconstruction of houses, mine clearing, employment, social infrastructure and similar projects, while 1.5m euros will be used for reform of the public radio-TV system. 
Nine million euros is intended for technical assistance, training and purchase of equipment for the customs and tax institutions and 1.5m euros for introduction of the legislation guidelines aimed at improving financial responsibility. 
Some 13.4m euros will be used for help with economic development, integration of the national Bosnia-Herzegovina market and promotion of direct foreign investments.

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