In anticipation of the fourth anniversary on 21 November 1999 of the signing of the Dayton Peace Accords, this report presents a detailed analysis of the agreement and the future of the Bosnian peace process. The report assesses efforts to implement the agreement annex by annex, identifying obstacles to continued progress and setting out key choices facing international policymakers.

A traditional peace treaty consists of a cease-fire and arms reduction and boundary demarcation agreements.  Dayton went far beyond these goals to create a new state, comprised of two multi-ethnic entities.  Dayton's aim was to not only stop the fighting, but to reverse ethnic cleansing and provide a blueprint for a unified country.

Today Bosnia and Herzegovina has three de facto mono-ethnic entities, three separate armies, three separate police forces, and a national government that exists mostly on paper and operates at the mercy of the entities.  Indicted war criminals remain at large and political power is concentrated largely in the hands of hard line nationalists determined to obstruct international efforts to advance the peace process. In many areas, local political leaders have joined forces with police and local extremists to prevent refugees from returning to their pre-war homes. The effect has been to cement wartime ethnic cleansing and maintain ethnic cleansers in power within mono-ethnic political frameworks.  The few successes of Dayton – the Central Bank, a common currency, common license plates, state symbols and customs reforms – are superficial and were imposed by the international community.  Indeed, the only unqualified success has been the four-year absence of armed conflict.

A thorough examination of the Dayton Peace Accords, annex by annex, indicates that the ethnic cleansers are winning the battle to shape post-war Bosnia.  All in all, significant portions of Dayton remain unimplemented.  In spite of the High Representative's recent energetic and long-awaited actions on refugee returns, it is too early to state whether or not they will translate into actual implementation.  Local authorities continue to demand donor aid in return for partial co-operation.  Dayton’s fragile and limited achievements to date could now be threatened as donor aid starts to fall.  The inability of donors to hold out the promise of aid could cause local leaders to be even more non-compliant than now.  The severe economic downturn and negative GDP growth that a reduction in aid will cause can only aggravate social unrest.  Pensions are in arrears, and estimates of unemployment range from 39 percent in the Federation to 50 percent in Republika Srpska. Social discontent has already burst into the open, with demonstrators regularly blocking highways and buildings.  Ominously, in the past, many local politicians have channelled this unrest into nationalism.

The current policies for implementing Dayton are flawed, due to the refusal of the NATO-led international force (SFOR) to fulfil its mandate and act as an implementing agent, despite clear authorisation to do so under the terms of the agreement.  In addition, two out of the three ethnic groups actively oppose Dayton, and are prepared to wait until such a time as the international community withdraws and the agreement can be laid to rest. Unless a way can be found to break the current deadlock, the agreement’s only major success – peace – will be increasingly at risk. While peace was a worthy and admirable goal, it was the promise of implementation of certain key principles and the creation of a unified state that persuaded the Bosniaks in particular to sign the agreement in 1995.  Unlike the Serbs and Croats, they demand a higher level of implementation of all the Dayton annexes throughout all three ethnic areas. The failure of current policies to ensure complete implementation could yet trigger renewed fighting, particularly as the international community starts to withdraw. As the 1998 Madrid Implementation Council noted, “Bosnia and Herzegovina’s structure remains fragile. Without the scaffolding of international support, it would collapse”.

The international community must now examine seriously its options for Bosnia and Herzegovina’s future.  These policy options include:

• Pulling out immediately;
   
• Maintaining the present approach;
   
• Rewriting the Dayton Peace Accords;
   
• Enforcing Dayton more robustly;
   
• Creating an international protectorate for Bosnia and Herzegovina.

The international community must decide if Dayton is worth salvaging, or whether a complete pullout is warranted, as isolationist forces in some countries urge.  If the international community decides to pull out, it must be prepared for the very real possibility that the Serbs, Croats and Bosniaks will attempt to achieve their unrealised war aims through violence.  All the hard-won progress of the last four years will be lost.  If the international community chooses this option, it must decide if it is willing to pay the social, political, economic, and human costs associated with a renewed war in the Balkans, as well as the implications for broader pan-Balkan and European stability.  If, on the other hand, the international community wishes to remain engaged in Bosnia, it must choose one of the remaining options, realising that some could also lead to renewed fighting.

The International Crisis Group does not believe that Option Two – maintaining the present approach – provides a viable basis for long-term peace in Bosnia. Option Three, while risking renewed fighting, could also lead to a positive reinterpretation of the political realities in place and lead to a lasting peace.  Options Four and Five, while requiring a more focused long-term international presence, would lock in the gains made to date and create an environment conducive to the development of an international exit strategy, and the emergence of Bosnia as a self-sustaining economic and political unit.  Option Four would require a more robust approach within the Dayton framework, both by SFOR and the Office of the High Representative (OHR), as well as more targeted approaches to aid.  Option Five, while unpopular abroad, is very popular in Bosnia, and would enable the international community to correct some of Dayton's mistakes.

Sarajevo, 28 October, 1999