Davos proves disappointing for Bosnia aid pledges

Date: 08/02/1996

IF Bosnians living in the rubble of war hoped for some rays of light to come from last weekend's meeting of the world's richest countries, they were disappointed.

Foreign Affairs Commissioner Hans van den Broek, who attended the World Economic Forum in the Swiss ski resort of Davos partly because of the opportunity it offered to speak to potential donors for the costly Yugoslav reconstruction programme, appeared in a pessimistic mood when he returned to Brussels.

“We should not underestimate the difficulties which still have to be overcome to get further commitments,” he said.

Van Den Broek held meetings with US and Japanese officials in Davos, but was unable to bring home any news that they had firmed up their pledges of aid.

He did, however, report one potential bright spot: officials of the World Bank, the co-sponsor of the reconstruction programme along with the European Commission, told the Commissioner that they were making progress on tearing down an obstacle that has kept Bosnia from receiving existing international development funds - its arrears to the World Bank.

Bosnia owes some 507 million ecu to the World Bank as its share of the former Yugoslavia's debt to the institution. Of that, 355 million ecu is already overdue and the arrears have prevented Bosnia from gaining membership of the institution.

Membership would make it eligible for soft loans and a host of other benefits. Officials now say Bosnia could be admitted before repaying the debt.

So far, the World Bank has pledged 110 million ecu, with half in the form of grants, while the EU has handed over 62.5 million ecu. “The others are less forthcoming,” say Van Den Broek aides.

Washington has promised 475 million ecu for the whole programme, no matter how long it takes, of which one-third may be spent this year.

However, none of that money has been handed over yet. Japan has pledged 39 million ecu, without specifying for which period, or indeed for which beneficiaries.

Commission officials say they are in close touch with Washington and will make contact with Tokyo soon to continue the fund-raising drive.

Both the Commission and the World Bank still plan to hold an international donors' conference, probably in Brussels, in April, but have not set a date because they want to make sure the potential guests, who will be the foreign ministers of the donor nations, agree on a strategy and are ready to come up with some money.

The pressure is on.

The man overseeing reconstruction efforts, International High Representative Carl Bildt, said last week that reconstruction was more important than military efforts in securing lasting peace in the region, adding: “Economic development is the key to political stability.”

Economic reconstruction, Bildt never tires of saying, drives political reconciliation, and he has voiced fears that “the wheels are turning too slowly”.

But the Commission is adamant that it is making headway in the war-torn region, saying: “Reconstruction is under way, there is money, and this is only the beginning.”