International policy in Bosnia is in disarray, and a new engagement strategy is required. The present High Representative, whose performance in 2006 has been much criticised, announced on 23 January 2007 that he would leave by mid-year. The Peace Implementation Council (PIC), to whom he reports and which is responsible for guiding implementation of the Dayton Peace Accords, meets on 27 February to decide the way forward. The most immediate issues to be resolved are whether the Office of the High Representative (OHR), and the robust ‘Bonn powers’ available to it, should continue in their present form.

This is not the time to begin disengagement: Bosnia remains unready for unguided ownership of its own future – ethnic nationalism remains too strong – and 2007 promises new tensions with the approach of the Kosovo status decision. But the central role in pressing Bosnia’s politicians to meet the many outstanding Dayton commitments and become a candidate for genuine European integration should now be played by the European Union, through its Special Representative (EUSR). OHR should be closed by the end of 2007, the Bonn powers – now effectively unexerciseable – should terminate with it, and – to avoid uncertainty, and enable time for effective planning and implementation of the transition – these decisions should be made and announced without delay.

The looming decision on Kosovo’s status will test the very fabric of the Bosnian state. Milorad Dodik, prime minister of Republika Srpska (RS), the Serb entity in Bosnia, and Serbian Premier Kostunica are exploiting the prospect of Kosovo’s independence to stoke separatist sentiments. Dodik’s threat to call a referendum on RS’s status if Kosovo becomes independent has increased tension with the Muslim-Croat Federation, the other constituent element of the Bosnian state. An increasingly assertive Dodik is openly challenging international authority to oversee Dayton implementation and the construction of viable state-level institutions. For the first time since 1997 there is a real prospect the RS may do more than merely obstruct.

Although there have been successes, much remains to be done to implement Dayton. Constitutional and police reforms are essential if Bosnia is to be viable. Changes in the judicial, military, public broadcasting and educational systems are also needed. Many reforms that have been passed have not been fully carried out. A strong EU Special Representative (EUSR), backed by the U.S., is needed to carry through peace implementation, facilitate resolution of conflicts between the sides and push hard for new laws and other state-building steps.

Previous High Representatives used the extraordinary Bonn powers, which made their office Bosnia’s ultimate authority, to dismiss senior officials, ban from public life important politicians and enact controversial legislation. These powers, dependent on OHR’s political credibility and the strength of the international military presence (the NATO-led SFOR until 2005, now EUFOR), have been hollowed out not only by the present incumbent’s deliberate and announced reluctance to use them, but – just as importantly – by EUFOR’s dwindling enforcement capability. While a case can certainly be made for the formal retention of the powers, particularly in the context of likely increased tensions in the period ahead, Bosnian officials are now more likely to defy a Bonn powers imposition, and it would be difficult to the point of impossible for the international community to turn the clock back successfully.

It is time instead for the EU, always seen as the ultimate anchor for a stable Western Balkans, to become the active core of the international effort in the country. The notions that Bosnia, which is still badly scarred by the 1992-1995 war, could be treated as any other applicant and that the mere attraction of membership at a distant date would suffice to overcome its polarising ethnic nationalism have proven mistaken. The EU must deploy new and different policy tools to keep peace implementation and progress toward membership on track.

An EUSR to whom the PIC also assigns the responsibility to monitor and be involved with all aspects of Dayton implementation, must show Bosnians of all ethnicities why it is in their practical interest to be part of a unified state and move towards the EU. To do so, he or she should rely on existing mechanisms such as EUFOR and the EU Police Mission (EUPM) and have available much larger EU funds, reinforced with bilateral aid, especially for rule of law and infrastructure projects, and use – and withhold – them as necessary to persuade Bosnian politicians to make tough decisions and compromises. Over time, if the inducements and disincentives are substantial enough, applied with the requisite decisiveness and political skill, and complemented as they must be by a heavily engaged U.S., they can change political dynamics so that Bosnians begin to take the initiatives themselves.

A good deal has been achieved in the past eleven years but the international community has not yet reached a point where it can safely declare victory and leave. The EU needs to lead a new stage of active international engagement that will not be brief. Disengagement before essential reform benchmarks are met and self-sustaining institutions established would put at risk all the gains made and the survival of a unified Bosnia, as well as increase the prospect that much of the Western Balkans would return to chaos.

Sarajevo/Brussels, 15 February 2007