Papic, Zarko

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I n t e r n a t i o na l  
Su pp o r t  
Po l i c i e s  
t o  
So u th -Eas t  
Eu r o p ean  
Co u n t r i e s  
 
 
 
L e s so ns  
( No t )  
Lea r n ed  
I n  
 
 
 
B-H MÜLLER  
 
 
 MÜLLER 
 
 25
CHAPTER II 
 
ŽARKO PAPIĆ 
 
 
THE SEE REGION AND STABILITY PACT 
 
1. The Stability Pact for SEE – Between the New Concept and Old International 
Practice 
 
1.1.  The settlement of the crises in the SEE Region was established in a new, regional 
framework by the Stability Pact (SP).  This was a late reaction to the failures in B-H and 
acceptance of the fact that the basic causes for B-H problems lie outside this country.   
The war in Kosovo confirmed the B-H experiences and, as it seems, accelerated the 
establishment of the SP, although again this time it was also late.  Of course, the SP relied 
on several previous attempts of regional initiatives in the Balkans, which, unfortunately, 
were only half-heartedly realized.   
The regional approach to solving the crises in certain countries is based on the fact 
that only regional stabilization, provision of peace, co-operation and development could 
solve the crises in these countries. Co-operation and integration of SEE countries was seen 
to be an important step for them toward European integration.   
 
1.2.  The Stability Pact1 aims at strengthening countries in SEE in their efforts to foster 
peace, democracy, respect for human rights and economic prosperity, in order to achieve 
stability in the whole region. To that end, the signatories of the pact pledge to cooperate 
towards: 
 
• preventing and putting an end to tensions and crises; 
• bringing about true democratic political processes, based on free and fair elections, rule 
of law, and full respect for human rights and fundamental freedoms; 
• creating peaceful, good-neighbor relations in the region through confidence-building and 
reconciliation mechanisms;  
• preserving the multinational and multiethnic diversity of countries in the region, and 
protecting minorities;  
• creating forward-looking market economies based on sound macro policies, markets 
open to greatly expanded foreign trade and private-sector investment, effective and 
transparent customs and commercial/regulatory regimes;  
• fostering economic cooperation in the region and between the region and the rest of 
Europe and the world, including free-trade areas;  
• promoting unimpeded contact among citizens;  
• combating organized crime, corruption and terrorism and all criminal and illegal 
activities;  
• preventing forced population displacement caused by war, persecution and civil strife as 
well as migration generated by poverty;  
• ensuring the safe and free return of all refugees and displaced persons to their homes;  
                                                
1 The Stability Pact for SEE was signed in Koln (Cologne) on 10 June 1999, in response to the EU's call to 
adopt a comprehensive platform for stability and development in the region. The pact has been signed by the 
Member States of the European Union, the governments of the region (Albania, Bosnia-Herzegovina, Bulgaria, 
Croatia, Hungary, Romania, the Russian Federation, Slovenia, the former Yugoslav Republic of Macedonia, 
Turkey), the United States of America, Canada and Japan.  Several organizations have also endorsed the Pact 
(i.e. the United Nations, OSCE, Council of Europe, the European Commission, NATO, OECD, WEU, IMF, the 
World Bank, the European Investment Bank and the European Bank for Reconstruction and Development.   
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• creating the conditions, for countries of SEE, for full integration into political, economic 
and security structures of their choice.   
The implementation of the SP is to be ensured by Regional Working Tables for 
South-East Europe. It is the task of the Regional Table to review the progress under the SP, 
move it forward and develop guidelines for advancing its objectives. A Special Coordinator 
has been appointed by the European Union, and endorsed by the OSCE. The Special 
Coordinator chairs the Regional Table and is responsible for promoting the achievement of 
the Pact's objective within and between the individual countries. The Regional Table should 
ensure coordination of the activities of and among the three Working Tables focusing on: 1) 
democratization and human rights; 2) economic reconstruction; 3) security issues.2   
 
1.3.  For B-H, the Stability Pact represented a possible, conceptually new, framework for 
solving internal problems - a possible stimulus for the normalization of the situation in the 
country.  The fact is that the democratization of neighboring countries, Croatia and the FRY, 
prevents external pressures and dangers which derive from policies aimed at the 
partitioning of B-H and the crises within the country.  Democratic changes in Croatia, 
although occurring independently of the SP, are an indication of this.  Political changes in 
the FRY, following the elections of 24 September 2000, may significantly alter political 
conditions for the implementation of the SP.  In the event of further, positive developments 
of the situation in FRY and Serbia and a new, improved, political environment in 
Southeastern Europe, the SP itself will face the real challenges, needs and, now also, 
possibilities for implementing its original ideas.  In other words, the “alibi” for inefficiency and 
lack of the will to develop policies of regional co-operation and integration disappear 
together with the Regime of Milosevic.   
 
1.3.1.  Apart from all the other problems, the B-H economy is completely divided into the 
economies of the FB-H and the RS. Attempts at its integration through the arbiter role of 
OHR in the implementation of the GFAP are inefficient and segmented. The division in 
economic management (different laws and economic policies) are the result of the real 
situation, divided markets and economic systems.   
The B-H economy is highly export-oriented.  The structure of this economy was 
created in ex-Yugoslavia and was based on trade with (at the time) other parts of the 
country, while export to foreign markets was also great.  Therefore, B-H is extremely 
interested in economic integration of the region and free trade through various 
arrangements.  Regional integration of the B-H economy would have, as its consequence, 
the reconstruction of a unified B-H market, i.e. domestic economic integration.  This would 
establish a new realistic basis for the full implementation of the DPA, not only in the sphere 
of “harmonizing” economic, tax or customs policies between the two Entities but also for 
establishing a true, unified economic policy and economic system.   
 
1.3.2.  Contrary to expectations, the possibilities that the SP offered in solving the B-H 
problem have remained completely unused:   
 
a) The B-H authorities have had, and still have, an ambivalent approach towards the 
SP.  They see it, negatively, as a potential and additional possibility of jeopardizing 
the country ’s sovereignty, and, positively, as a possible new source of donations, in 
compensation for the decrease of donations directed to B-H.  In both cases, B-H 
remains completely outside the original aim of the SP, regional integration and 
development policies it would enable.   
 
Along with this, there is a certain degree of passivity regarding the SP. Cynically, the 
spectacle of the SP Summit, held in Sarajevo in July 1999, had the same role as the 
                                                
2 See: UNDP Special Report, Human Security in South-East Europe, UNDP, 1999. 
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Olympic games in 1984. They took place, they passed and they witness to the 
“importance” of B-H.   
 
b)  The implementation of the GFAP is taking place completely independently of the SP, 
as if the latter does not exist.  It seems that the basic idea of the SP was not 
understood and that the implementation of the GFAP is to be closed within the 
frameworks and problems of B-H without a real possibility for finding efficient 
solutions. This misunderstanding of its own ideas by the international community, 
which is in both cases (GFAP and SP) the creator and initiator, is surprising.   
 
Therefore, there is an attempt to resolve the problems of GFAP implementation 
through suggestions for discussions on “Dayton 2” within a broad scope of ideas 
from the withdrawal of the international community and rewriting of the GFAP to the 
establishment of a Protectorate.  Metaphorically speaking, the Stability Pact could be 
Dayton 2, i.e., a possibility for solving the B-H problem through regional co-operation 
and integration, as well as through the perspective of participation in European 
integrations.   
 
c)  Within B-H, the Stability Pact is not achieving the necessary link of two basic flows 
of assistance and support:  the normalization and strengthening of democratic 
institutions through implementation of the civil aspect of GFAP, as well as assistance 
and support to economic reconstruction, transition and solving of the social problems 
of B-H, which take place through a sequence of separate programs, of which the 
World Bank’s Priority Reconstruction and Recovery Program (PRP WB) is the most 
important.   
 
Instead, the programs of economic reconstruction remain dogmatically “locked” in 
the conditions they were in when the Stability Pact did not exist, and they stay 
without any link to Stability Pact activities.   
 
1.4.  The basic problem, however, is related to the Stability Pact and its one-year 
experience. The SP itself is at a crossroads between being a new international framework 
that will stimulate and enable real regional integration or being only one more channel for 
the inefficient distribution of donations to SEE countries.   
For now, the SP is still just a mechanism of distribution of donations through projects 
in SEE countries.  In other words, it is repeating the mistake made in B-H years ago. Its 
most important role has been neglected, to be an instrument for designing and 
implementing a coherent and long-term oriented strategy for regional reconstruction and 
development, regional co-operation and integration, etc. The Stability Pact has no vision for, 
nor strategy of, support for the SEE countries.   
It is important to remember that the original aim of the Stability Pact was to foster 
SEE cooperation and integration as a precondition for joining the EU, while financial support 
to projects of SEE countries (donations) was to provide support for new strategies.  The 
Scope of these new policies, in the economy, for example, was aimed at the following: 
developing a free trade zone within the region; zero tariffs on EU imports from the regions; 
zero tariffs on the region's import from the EU; support to trade with agricultural products; 
free trade with the EU, EFTA, CEFTA and all accession candidates to the EU; radical 
banking reforms, EURO-DM currency board; European monetary association agreement 
and, later on, full Euro-ization, etc.3   
The activities of the Stability Pact and its working tables so far have neglected 
strategies or policies and have instead amounted to nothing more than the distribution of 
financial support to projects of the countries and various organizations from SEE.  These 
                                                
3 See: CEPS, A System for Post-war South-East Europe, Working Document No. 131, Brussels, 3 May 1999.  
 28
projects are mostly the standard projects for solving problems of certain countries.  It is easy 
to fulfill the requested condition that the projects should be the projects of two or more 
countries of the Region, because the link of solving problems is a geographic fact (for 
example, with regard to infrastructure).  Therefore, these projects are not leading towards 
new strategies of regional integration, but, in the best case, are simply adjusted to the 
region’s geography.   
The problems facing B-H regarding the lack of utilisation of the possibilities that the 
Stability Pact has to offer are in great measure the consequence of wrong implementation 
of the SP itself in the entire region.   
 
1.5.  In the context of the analysis of regional problems and the Stability Pact, it is 
important to warn that the same policies and same mistakes that took place in B-H are 
being repeated in Kosovo.   
After two years of experience, the UNMIK system is demonstrating obvious 
impotence in solving important problems that led to the international intervention, including 
the NATO air strike. At the same time, all of the UNMIK and OSCE activities are being 
carried out independently of Stability Pact activities and thus, attempts to solve the crisis are 
once again being carried out in isolation, with the greatest chances of failure.  Within these 
efforts, the following mistakes of the international policies in B-H are being repeated:4         
 
1.5.1.  The fact that the local population is capable of being the most powerful force for 
change in Kosovo, in particular the developed local NGO sector, has been neglected.   
 
1.5.2.  Resources allocated for the key aims of international intervention are inadequate.  If 
democratization and human rights are understood to be at the center of justification for the 
war (whose expenses are estimated at being 22.5 billion USD),5 it is difficult to comprehend 
that the budget of the OSCE Democratization Program only amounts to 3 million USD.   
 
1.5.3.  Words are not being matched with actions carried out by the donor States.   
 
1.5.4.  The difference between true development (“growing”) of a democracy from the grass 
roots level and organizing a show-piece election is not being taken into consideration. The 
alibi for the modest failure of democratization is being sought in the semblance of 
democracy in elections.   
 
1.5.5.  Standards of international policies are erratic. 
 
This has, once again, brought us closer to the basic problem of the inharmonious 
functioning of international organizations in relation to the new conditions in the world, the 
inefficiency of their approach and policies for solving crises.  
 
1.6. The dramatic development and aggravation of the crisis in Macedonia, together with 
the multiplication of diplomatic "initiatives", are threateningly reminiscent of the beginnings 
of the war in B-H.  No "diplomatic lesson" has been learned, and a resolute intervention of 
international factors and recognition of the true causes of the crisis are lacking.   
 
 
 
                                                
4 See: Lesley Abdela: Kosovo – Missed Opportunities, Lessons for the Future, global@shevolution.com, 
February 2000.   
5 GAO published the data that the US military costs in Kosovo in 1999 (including Operation Joint Forge and 
Operation Deliberate Forge) only amounted to 3 billion USD, and for 2000, around 2 billion USD are planned. It 
seems that the cost assessment of the war in Kosovo remains open to question.   
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2. Towards the “Rebirth” of the Stability Pact – Development of New Regional 
Cooperation Policies 
 
2.1.  The Stability Pact vision had three basic elements: European integration, regional 
security and the expanding of democracy.  In essence, the reasons for its existence are 
present today.  To recapture its vision, the Stability Pact needs to be refocused.6   
 
2.2.  It seems, however, that the true problem of inefficiency is not just in the absence of 
efficient instruments of its own organization, too broad a list of aims and activities or, 
generally, the very important problem of passivity and weak State institutions in the Region. 
Perhaps the problem lies in the different views of the Stability Pact.  Let us simplify these 
differences to a “defensive” or “offensive” understanding of the role of the SP.   
The “defensive” role implies that the aim and role of the SP is to stabilize and pacify 
SEE. In order to do so, it is necessary to support regional cooperation, integration with 
Europe, regional security and the spreading of democracy.  Within the framework of this 
approach, the political aspect of the SP is crucial.   
The “offensive” role implies all of the above, but with a completely different 
sequence of priorities and a different approach.  Regional cooperation and economic 
integration are a precondition for economic development, integration with Europe, regional 
security and the development of democracy.  Strengthening State institutions as 
transparent “public service providers” is of great significance for this.  Political stability will 
come as a result of the above mentioned.   
Both approaches are legitimate, while the first has dominated from the outset to this 
day.  It seems as though this is the basic reason for the inefficiency of the SP.   
 
2.3.  Reasons for the further existence of the Stability Pact do not, primarily, lie in the fact 
that, following its establishment, SEE remains a crisis area (Kosovo, Macedonia).  New 
post-Stability Pact crises in SEE demonstrate that nothing has changed significantly with 
the establishment of the SP.  Changes did not take place due to the “defensive” approach, 
nor did they take place in those areas where this approach most was insisted upon and 
from which most was expected, in the field of regional security.   
The reasons for the future existence of the Stability Pact only exist if its approach is 
altered, not because problems still exist, but because they can only be solved using a new 
“offensive” approach.   
Above all, this should be achieved through economic cooperation and integration of 
SEE, and the development of democratic State and civil society institutions.  International 
support policies to SEE, both within and outside the SP, have to support integration and 
cooperation within SEE, as a condition for integration into Europe.   
 
 
References 
 
Abdela, L. (2000) Kosovo – Missed Opportunities, Lessons for the Future. global@shevolution.com 
CEPS (1999) A System for Post-war South-East Europe. Working Document No. 131, 3 May. 
Brussels.  
East West Institute/European Stability Initiative (2001) Democracy Security and the Future of the 
Stability Pact for South Eastern Europe – A Political Framework. 4 April. 
                                                
6 For more details see: East West Institute/European Stability Initiative, Democracy Security and the Future of 
the Stability Pact for South Eastern Europe – A Political Framework, 4 April 2001. 
 30
UNDP (1999) Special Report: Human Security in South-East Europe. New York: Regional Bureau for 
Europe and the CIS, UNDP. 


South Eastern Europe and the Stability Pact

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