Bosnia

In my last blog I condemned the US’s illegal attack on Venezuela and worried about what might follow given the apparent lack of a broadly considered and agreed plan. In this blog I will contrast it with the approach taken at the end of the vicious civil war between the Croat, Serb and Bosnian populations of Bosnia and Herzegovina.

The fighting in Bosnia and Herzegovina ended with the signing of the Dayton accords. “Three decades ago, in November 1995, the U.S.-brokered Dayton accords ended the Bosnian war, a three-and-a-half-year ethnic conflict that killed roughly 100,000 people and displaced two million. The settlement imposed a complex power-sharing structure on a divided country, promising the state of Bosnia and Herzegovina a new start.” This quote is from an excellent assessment of that agreement and the new constitution for Bosnia and Herzegovina that it created by Elmira Bayrasli in Foreign Affairs: “Bosnia’s Unfinished Peace”

I drafted the monetary section of that constitution, which established a central bank bound by currency board rules (i.e. no monetary policy as the money supply is determined by the public’s demand for and willingness to purchase its currency). I also led the IMF teams that drafted the Central Bank Law that merged the existing three central banks (Croat, Serbian and Bosnian) into one national bank and currency. The negotiations with the three (obviously) future governors of the Central Bank of Bosnia and Herzegovina (CBBH) lasted for over a year of heated discussions of the CBBH’s powers and the details of its currency notes. For details see my account in “One Currency for Bosnia”  Surprisingly to many the CBBH’s currency board rules were accepted instantly by all three with no debate. The reason was that the three didn’t trust one another and currency board rules eliminate an monetary policy discresion.

The Dayton accord was the product of intense negotiations between the Presidents of Croatian, Serbian and Bosnian provinces of B&H and diplomates from the US, UK, EU and Russia culminating with the agreement at the Wright-Patterson Air Force Base in Dayton Ohio—the Dayton Accord. To lay out the sharp contrast between these negations and the lack of them in the current “take over” of Venezuela, I will quote extensively from Wikipedia:

“During September and October 1995, world powers (especially the United States and Russia), gathered in the Contact Group, pressured the leaders of the three sides to attend settlement negotiations; Dayton, Ohio was eventually chosen as the venue.

“Talks began with an outline of key points presented by the US in a team led by National Security Adviser Anthony Lake in visits to London, Bonn, Paris and other European stops 10 – 14 August 1995. These included Sochi, to consult Russian Foreign Minister Andrei Kozyrev. Lake’s team handed off to a separate US inter-agency group led by Assistant Secretary of State Richard Holbrooke, who went on to negotiate with Balkan leaders in their capitals. The Holbrooke crew conducted five rounds of intense shuttle diplomacy from August to October, including short conferences in Geneva and New York that resulted in the parties’ adoption of principles for a settlement on 8 and 26 September respectively.

“The Dayton conference took place from 1–21 November 1995. The main participants from the region were the President of the Republic of Serbia Slobodan Milošević (whom the Bosnian Serbs had previously empowered to represent their interests), President of Croatia Franjo Tuđman, and President of Bosnia and Herzegovina Alija Izetbegović with his Foreign Minister Muhamed Šaćirbeg.

“The peace conference was led by US Secretary of State Warren Christopher, and negotiator Richard Holbrooke with two co-chairmen in the form of EU Special Representative Carl Bildt and the First Deputy Foreign Minister of Russia Igor Ivanov. A key participant in the US delegation was General Wesley Clark. The head of the UK’s team was Pauline Neville-Jones, political director of the Foreign and Commonwealth Office. The UK military representative was Col Arundell David Leakey. Paul Williams, through the Public International Law & Policy Group (PILPG) served as legal counsel to the Bosnian Government delegation during the negotiations.”

The history and situation of Bosnia and Herzegovina was dramatically different than Venezuela. Ending its civil war required extensive negotiations and considerable international oversight of compliance to the agreed arrangements. As noted in the Foreign Affairs article sighted above, a serious mistake was holding national elections far too earlier. The intense hatreds of the three national groups were not given enough time to soften resulting in the election of hardliners and the continuation of the war by other means. The second mistake was the failure of international oversight (the UN High Representative) to fully exorcise its powers. None the less the three nation country has held together peaceably for three decades following its civil war.

While the political situation in Bosnia remains fragile (see the excellent article sited above in Foreign Affairs) the central bank itself has been a great success, widely trusted and respected by most citizens from the three provinces. I attribute this to its enlightened leadership and the central bank law with its currency board rules. Tragically the DOGE chain saw seems to have eliminated US capacity for effective diplomacy. “At the breaking point”