EXECUTIVE SUMMARY AND RECOMMENDATIONS
Put together under the tutelage of representatives of the international community in the aftermath of the November 2000 general elections, the ten-party coalition known as the Democratic Alliance for Change has governed the larger of Bosnia & Herzegovina�s two entities and led the state-level Council of Ministers since early 2001. Intended by its sponsors and members to sideline the three nationalist parties that had fought the 1992-95 war and ruled their respective pieces of BiH thereafter, the Alliance was also expected to undertake thoroughgoing reforms and to provide proof that implementation of the Dayton Peace Accords might yet produce a viable state.
This alliance of Federation-based parties of disparate size, ideological orientation and national coloration has cooperated at state level with parties from Republika Srpska that are both in power and in opposition in that entity. The Alliance has thus lacked cohesion on both levels of government. It has sought to push a reform agenda, but one that cannot help but reflect the lowest common denominator of what is acceptable to its different sets of partners in the Federation and the Council of Ministers. Changes acceptable to the Federation parties have often proved anathema to those from the RS. Even in the Federation, the Alliance has had difficulty in carrying with it the cantonal governments that are meant to be under its control.
Given its unnatural birth and incoherent membership - not to mention the limitations imposed by Bosnia�s dependent status and relative poverty - the Alliance for Change has registered significant successes. They have not proved sufficient, however, to bind the Alliance parties together, whether in respect to what remains undone among promised reforms or to fight the forthcoming elections as a bloc. The Alliance is now expiring. Not only are its member parties and their headstrong leaders busy positioning themselves separately for elections that will be conducted according to new rules, but the Alliance as a whole is being subjected to sustained attack from inside and without as the race commences.
The 5 October 2002 general elections will for the first time be run by Bosnians and elect governments that will serve for terms of four rather than two years. They will also have to give effect at entity level to the constitutional amendments agreed with or imposed by former High Representative Wolfgang Petritsch in April 2002. These provide for fair representation of each of BiH's three �constituent peoples� in both entities� legislatures, governments, judiciaries and administrations. Four-year mandates, for their part, will give the victors opportunities actually to accomplish something while depriving them of excuses for failing to do so. The pursuit of narrow party political or national interest, the absence of vision or application and manifestations of incompetence or criminality will be less tolerable. In order, however, to take advantage of the new circumstances and to enhance their chances of moving Bosnia forward, any new coalition or alliance will need to learn the lessons of the Alliance for Change�s brief exercise of power.
Both the international community and non-nationalist Bosnians expected much from the Alliance: the eradication of rampant corruption, economic reforms, jobs, regular pensions and a new relationship with BiH�s foreign overseers. Improvements indeed followed in those areas where consensus existed (enhanced revenue collection and fiscal reforms such as the merger of pension funds), or where there was little resistance (fulfilment of conditions for accession to the Council of Europe) or that were perceived as inevitable (constitutional reforms and anti-terrorist measures). But in those spheres requiring a commitment to overcome diverging interests within the Alliance � such as reform of the social service sector, privatisation and, above all, economic revival � action was to be deferred or abandoned.
In governing the Federation, the Alliance has had the daunting task of doing battle with the legacy of corruption, national-territorial division and near bankruptcy bequeathed by the long years of parallel rule by the (Bosniak) Party for Democratic Action (SDA) and Croatian Democratic Union (HDZ). It has also had to cope with the fact that these two entrenched power structures retained or shared power with Alliance parties in various cantons, cities, government institutions and public enterprises. Moreover, the installation of the Alliance was soon followed by a constitutional crisis provoked by the HDZ, which proclaimed �Croatian self-rule� in March 2001. Once this challenge was seen off, the Alliance confronted, in the aftermath of the 11 September attacks on the U.S., the urgent necessity of a reckoning with Islamist elements formerly patronised and protected by the SDA. In taking on such people the Alliance risked upsetting its core Bosniak constituency and destroying its own tenuous unity. It also exposed itself to accusations that it was forsaking human rights and the rule of law in order to do America�s bidding.
Despite such trials, the Alliance has managed to make notable improvements in areas such as budgetary and financial discipline in the Federation. At the level of the state it has focused with some success on boosting the dignity, competence and image of Bosnia & Herzegovina. Albeit oversold as a slogan, �partnership� with the international community has replaced the confrontation that characterised the old regime. Bosnia has finally become a member of the Council of Europe and may be on the threshold of completing the �road map� that will make it eligible for a feasibility study leading to a Stabilisation and Association Agreement with the European Union (EU). Finally, the Alliance made a significant difference in negotiating the entity constitutional amendments that constitute the first major step in revising Dayton structures and which should gradually transform state and entity governance over the next few years.
Yet the Alliance has failed to fulfil expectations that it would put more bread on Bosnian tables. In the first place, it has been too cautious in pushing the fundamental reforms required to unify the BiH economic space and restructure the economy by completing privatisation and liberating the private sector. It has busied itself instead with establishing its member parties� control over public companies and disputing - to no discernible benefit - the previous privatisations of money-spinners such as Fabrika Duhana Sarajevo (Sarajevo Tobacco Factory, FDS) and Aluminium Mostar. Attempts to gain control over public-sector firms have resembled an endless chess game among the Alliance parties. Privatisation has only crept forward, burdened both by an ill-conceived method imposed by the international community and by the reluctance of the Alliance parties to divest themselves of their principal � if ever diminishing � source of power, patronage and funds.
Secondly, the Alliance has wasted valuable time that it might have used to devise a coherent economic development plan. There is still no agreed vision of Bosnia�s economic future, and the various schemes promoted by one or another Alliance party have remained vague, fragmentary or mutually exclusive, ranging from ardent Thatcherism to reform socialism. Unfortunately, the absence of an agreed reform agenda has extended to other spheres as well: rule of law, state-building and refugee return.
Although it is too late now to remedy this lack in practice, Bosnia's political parties - and especially the Alliance parties - should use the current campaign for more than slinging mud, revelling in scandals and glorifying their leaders. They need to think and plan ahead, offering voters positive manifestos as well as negative attacks on their rivals. The issues and challenges that will confront the governments formed after 5 October are already apparent. The formation of a new alliance will prove easier - and its chances of delivering on its member-parties' promises will be greater - if a measure of programmatic clarity and, perhaps, even concord can be offered to and endorsed by Bosnian citizens over the months ahead.
To help focus the election campaign on fundamental issues of economic development and reforms of the social, fiscal and governance sectors and, thereby, to enhance the chances that the coalition governments which emerge will be both committed and equipped to pursue a clearly defined reform agenda, ICG makes the recommendations that follow.
To International Organisations, Civil Society Groups and the Bosnian Media:
1. Press the political parties to acknowledge and take positions on the most important economic and political challenges facing BiH and in particular invite them to sign a pre-election compact (or social contract) committing to plans for resolving the economic and social crisis confronting BiH.
To Donor Countries and Other Friends of BiH:
2. Based on the conclusions of the Peace Implementation Council, the post-accession requirements of the Council of Europe and the various international credit and stand-by arrangements to which BiH governments are committed, assist those parties willing to cooperate to draw up manifestos for reform that set out clearly defined goals and identify agents of change in the economic, social, legal, fiscal and refugee-return sectors.
3. Publicise fully the cooperation or non-cooperation of individual parties.
4. Use such manifestos for establishment of benchmarks against which to measure the performance of post-election governments and to push for further reforms.
Sarajevo/Brussels, 2 August 2002
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