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Borislav Paravac

Update No: 112 - (26/09/06)

Trouble is brewing again
In 1995, the US-brokered Dayton peace accords ended the Bosnian war and declared Bosnia-Herzegovina (BiH) a single state made up of two entities, the Serb-run Republika Srpska and the Muslim-Croatian federation-- a deal that forced exhausted, ethnically-cleansed enemies into uneasy partnership. The West opposes the break-up of Bosnia. 
There is no doubt that recent developments in the Balkans have unsettled the region and BiH in particular. The secession of Montenegro in May-June has set an example for self autonomy, which others are heeding. The new centre-right government in Macedonia is alienating the ethnic Albanian minority there. The Albanians in Kosovo in Serbia itself are restless to leave.
This is all happening as Bosnia enters an electoral season with elections in October. There is a possibility of trouble ahead.

The Serbs do not see their future in Bosnia - says Serb PM 
Bosnian Serb Republic Prime Minister, Milorad Dodik, said on September 12th, in what may turn out to be an historic admission, his people did not see their future in Bosnia, which they have reluctantly shared with the Muslim-Croat federation since war ended in 1995. 
A lingering Bosnian Serb secessionist sentiment has been revived after Montenegro's independence vote in May and is expected to become much stronger if Serbia's Albanian-dominated, UN-run province of Kosovo becomes a sovereign state this year or next, a very likely event.
"The dominant feeling among the people in the Serb Republic is that they don't see the Serb Republic in Bosnia in the long run," Dodik told a news conference ahead of a national election on October 1st.
Blunt-speaking Dodik, courted by the West in the late 1990s when he ousted from power the nationalist loyal to war crimes suspect Radovan Karadzic, caused a storm in May when he said the Montenegrin recipe could be applied elsewhere in the region. 
He backed off after peace overseers warned it would breach the 1995 Dayton peace treaty. But the public mood has swung behind the idea and Serb politicians have since threatened to call for a referendum if their region's existence was in danger. Indeed, Dodik himself re-iterated this stand on radio and TV two days later. He said he will call an independence referendum if U.N. envoys insist on abolishing the Serb-run entity of Bosnia-Herzegovina. He said he will never agree to reform the police and security forces as demanded by the European Union as a condition for EU association talks, Serbia's RTS radio-television said on September 14th. 
For now, however, Bosnian Serbs would freeze the idea of a vote on secession because "international authorities" have reassured them that the abolition of their region, advocated by most Muslim parties, was not an option, Dodik said. 
"(But) it could be a real option in the future if there was no equality," said Dodik, whose Alliance of Independent Social Democrats is favourite in the Serb Republic for the election. "Our basic commitment is Bosnia made up of two 'entities'." 

"No negotiation over separate police" 
Muslim parties have long advocated the abolition of the Serb Republic, which they claim was founded on genocide, in order to strengthen the state and make it more viable. 
The European Union sees the strengthening of Bosnia's weak central government, including the creation of a single and multi-ethnic police force, as a condition for establishing closer ties with Bosnia. But the Serbs, who have agreed to the creation of a single army, state tax administration and state court in the last three years, see the police as the ultimate proof of their autonomy and oppose its merger with the Muslim-Croat police force. 
Their police has to be preserved as a separate force -- though as part of the Bosnia-wide police structure -- and be financed through Serb Republic institutions, Dodik said. 
"These are the two basic questions and there is no negotiation on them even if that meant the break-up of the talks with the EU," Dodik said, referring to the talks on a Stabilisation and Association Agreement with the bloc. 
The agreement had been expected to be signed in early 2007 but that now looks highly unlikely. 
In an interview on RTS, Dodik said he knew the UN-appointed high representative in Bosnia could relieve him of his post, but threatened he would go into opposition in non-governmental organizations to keep on advocating Bosnian Serbs' stands and wishes.

Serbs invoke Bosnia break-up in bid to keep Kosovo
There is another perspective on the matter, seen from Belgrade. Serbia is invoking the spectre of a break-up of neighbouring Bosnia before elections there, as it battles to block the independence of its southern province of Kosovo. 
Bosnia's Serbs are talking of secession in the campaign for the October 1 election because Serbia is using them as a lever, analysts and diplomats say. 
"Belgrade has been using Bosnian Serbs in its bargaining, telling them to speak up and say they'll claim independence if Kosovo goes," said a Sarajevo-based diplomat.
Serbia opposes independence for its southern Kosovo province, run by the United Nations since NATO military force compelled Serbia to withdraw its forces in 1999 to end what the West said was Serbian ethnic cleansing during a guerrilla war. Western diplomats predict Kosovo's two million ethnic Albanians, representing a 90 percent majority, will get independence by the end of the year, courtesy of the United Nations and against the will of Serbia if the Belgrade government does not change its stance.
More by innuendo than open threat, the Serbs are saying: amputate Kosovo and you can watch Bosnia fall apart too, as 1.4 million ethnic Serbs elect to part company with 2.6 million Muslim Bosniaks and ethnic Croats. Legally, no party in Bosnia has the right to secede. But then neither does Kosovo, on paper. 
"We are the guarantor of peace and the constitution in this state, and it is our responsibility that Bosnia's integrity remains intact," US ambassador Douglas McElhaney told the Bosnian Serb daily Nezavisne Novine earlier this month. 
"Anyone who brings into question this integrity should know that we do not forget," warned McElhaney, whose office issued a further statement, saying "there will be no referendum ... and that is the official policy of the U.S. government".
Bosnia's international peace overseers say the separatist rhetoric is simply an ingredient in an unusually heated general election campaign, inflamed by the Serbs' defiant rejection of international demands to forge a single police force for Bosnia. 
Senad Slatina of Sarajevo Centre for European Integration Strategies (CEIS) says Dodik's talk can cut both ways. Besides pandering to secessionists, it wards off any threat to an ethnically exclusive Serb Republic.

Echoes of Karadic 
"It is just a continuation of (Radovan) Karadzic's wartime policies," he said, referring to the fugitive Serb wartime leader wanted by the UN war crimes court on genocide charges. "It is obvious that we are bracing for a very serious political crisis because of the Serbs' attitude," Slatina said
Instead of completing a Stabilisation and Association Agreement (SAA) with the EU -- the first rung on the ladder to membership -- talks could be blocked by Dodik's opposition to the EU-sponsored police unification plan. 
But polls show secession is popular, and Dodik may have let the genie out of the bottle, said Serb analyst Tanja Topic. 
"I think he himself has been surprised with the response to all this and he has left himself very little space for manoeuvre. He's very close to the wall," said Topic. 
"I think he knows he'll have to abandon this idea at a certain point. But we'll just have to wait and see." 

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Russian firm eyes Brod refinery

Russian state oil company, Zarubezhneft, is interested in buying Bosnian refinery Brod, but only after its 190 million Euro debt is settled, Prime Minster of Republika Srpska, Milorad Dodik, said, Energia reported recently.
Dodik was in Moscow negotiating the sale of the refinery, as well as oil distributor Petrol and motor oil refinery, Modrica. All three firms are based in the Bosnian Serb Republic, Republika Srpska.
"The partners from Russia want to invest 330m Euro in the reconstruction of the Brod refinery, 34m Euro in the reconstruction of the Modrica refinery, as well as in the reconstruction of petrol stations belonging to Banja Luka-based Petrol," Dodik said. In March, Dodik rejected an offer by Israel's Alon Israel Oil for the state's 65 per cent stake in the refinery as too low. Its total value has been estimated at 249m Euro.
The refinery, based in northern Bosnia on the border with Croatia, can process 120,000 tonnes of crude a month, covering 80 per cent of Bosnia's needs. It lost markets because of the Balkan country's 1992 to 1995 war.

Energoinvest DD, Gazprom talk contract, debt

Gazprom's export arm Gazexport and Bosnia's Energoinvest DD are holding talks on conditions for supplies of natural gas to Bosnia from October 2006, a source in the Gazexport press service said.
The source said that Bosnia has a debt to Gazexport of US$104.8m for supplies of Russian gas in the period from 1991 to 1995.
The Russian side has for a long period of time tried to regulate this issue. The Bosnian side acknowledges its debt back in 1995, immediately after supplies of Russian gas were restarted, after the end of the war in Bosnia, Interfax News Agency reported.
"This schedule has not yet been submitted. Despite that, Gazprom for over 10 years has supplied gas to the country without disruption. Consequently, as we are meeting all our obligations we want the Bosnian side to meet its obligations also. However, no concrete steps have been taken yet. The current contract to supply Russian gas expired on October 1st, 2006.
"As a result, in negotiations the Bosnian side was officially informed that the question of extending the current contract will be considered in tandem with specific proposals," the Gazexport source said. Gazexport exported 380 million cubic metres of gas to Bosnia and Herzegovina in 2005.

INA-MOL buys Energopetrol 

Croatian-Hungarian consortium INA-MOL signed on September 8th in Sarajevo a deal with Bosnia's Muslim-Croat Federation Government taking over its 67 per cent of shares in Bosnia's major fuels retailer company Energopetrol, Deutsche Presse-Agentur (dpa) reported. 
The deal was signed after more than a year and a half of negotiations and was expected to cost INA-MOL consortium more than 110 million Euro. Some 35 million Euro would go to pay Energopetrol's debts, while the rest would be gradually invested in the next three years to improve and modernise the company, officials said. 
Bosnia's Muslim-Croat Federation government would keep 22 per cent of shares in Energopetrol, while small shareholders would keep the remaining 11 per cent of shares. Purchasing Energopetrol's shares and spreading business to Bosnia, according to head of the Hungarian MOL management Zsolt Hernadi, would significantly contribute to the further improvement of the oil industry in Bosnia-Herzegovina. Hernadi also said INA-MOL consortium "is ready to make Energopetrol a regional oil giant." Buying Bosnia's Energopetrol, INA-MOL inherited 64 petrol stations across Bosnia-Herzegovina as well as more than 1,050 employees. 

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