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The authors

Editing:Moira Davidson-Seger

Cover photo:

Karsten Thielker/Images.deBosnia and Herzegovina, Tuzla, 1996

Andreas Heinemann-GrderSenior researcher, Bonn InternationalCenter for Conversion, Germany

Tobias PietzResearcher, Bonn International Centerfor Conversion, Germany

Shay DuffyRetired Colonel, Demobilization &Retraining Advisor at the GenevaCentre for the Democratic Control ofArmed Forces, Switzerland

Contents

ZusammenfassungGerman summary 4

Summary 5

Introduction and Goals 6

Background 8

Framework DecisionsThe Dayton Accordsand Follow-up Agreements 11

The Emergency Demobilization and ReintegrationProject (EDRP) 16

The Pilot Emergency Labor RedeploymentProject (PELRP) 21

IOM Transitional Assistance to Former Soldiers

in BiH (TAFS) 26Interviews/ Behavioral Patterns 32

Further Downsizing and the Future ArmedForces of Bosnia and Herzegovina 35

Lessons and Recommendations 36

DCAFs Demobilization and Retraining Strategy 38

List of Selected Acronyms and Abbreviations 40

List of Persons Interviewed 42

References 43

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Andreas Heinemann-Grderand Tobias Pietzwith Shay Duffy

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ZusammenfassungGerman Summary

Welche Errungenschaften undDefizite sind in Bezug auf dieDemobilisierung und Reintegration vonEx-Kombattanten in Bosnien-Herzegowina seit dem Dayton-Abkommen von 1995 zu verzeichnen?Welche Lehren lassen sich daraus frlaufende und knftige Demobili-sierungs- und Reintegrationsvorhabenauf dem westlichen Balkan ziehen?

Am Ende des bosnischen Kriegesstanden ca. 400.000 bis 430.000Kmpfer unter Waffen. Nach einerspontanen Demobilisierung in denJahren 1995/ 96 solcher Soldaten, dienur fr den Krieg eingezogen wordenwaren, implementierte die Weltbank ab1996 zwei Reintegrationsprojekte,gefolgt von einem noch laufendenProjekt der International Organizationfor Migration (IOM). Bis Ende 2001verringerte sich so die Strke derStreitkrfte auf 34.000 Mann in beidenTeilgebieten, der bosnisch-kroatischen

Fderation und der Rebublika Srpska.

Im Mittelpunkt des folgendenEvaluationsberichtes stehen die zweiProjekte der Weltbank und jenes derIOM. Die Darstellung basiert aufGesprchen mit Vertreterninternationaler Organisationen undnationalen Entscheidungstrgern in derRepublika Srpksa sowie der bosnisch-kroatischen Fderation, auf 35standardisierten Interviews mit Ex-Soldaten aller drei ethnischen Gruppen

und auf Projektberichten.

Das Dayton-Abkommen legte dieknftigen Streitkrftestrukturen nichtfest - ein Manko, das berproportionaleMilitrausgaben in den Teilgebieten vonBosnien-Herzegowina bis in die

Gegenwart begnstigte. DieNotwendigkeit zur Truppenreduktionber die Nachkriegsdemobilisierunghinaus ergibt sich aus der immensenHaushaltsbelastung und demwachsenden Druck der internationalenGemeinschaft, die konfderaleTrennung in eine serbische und einebosnisch-kroatische Armee zugunsteneiner gemeinsamen, gesamtstaatlichenSicherheits- und Verteidigungspolitik zu

berwinden. Erst ab derJahrtausendwende wurde erkannt, dassder Umbau der Streitkrfte und derentsprechende Truppenabbau Teil einerumfassenden, funktionalen Reform desgesamten Sicherheitssektors sein muss.

Das konstitutionelle Dilemma Bosnien-Herzegowinas, nmlich die quasi-imperiale Letztentscheidungsmacht derinternationalen Reprsentanten und diegleichzeitige Existenz demokratischlegitimierter Institutionen in Bosnien-Herzegowina, belastet derweil die

Sicherheits- und Verteidigungspolitik.Beide Seiten betonen die Zustndigkeitder jeweils anderen Seite und meinendeshalb, nur begrenzt Verantwortungwahrnehmen zu knnen. Der semi-souverne Status von Bosnien-Herzegowina, das weitreichende, jedochdiffuse internationale Mandat und dieunklare militrpolitische Kompetenz-zuweisung zwischen dem Office of theHigh Representative, der StabilisationForce SFOR und der Organisation frSicherheit und Zusammenarbeit in

Europa (OSZE) einerseits und denRegierungen der beiden Teilgebietenandererseits fhren hufig zuwechselseitigen Blockaden.

In Bezug auf das Mikromanagementder Demobilisierung und Reintegrationbetont der vorliegende Bericht dieNotwendigkeit

zur Koordination und Konsistenzinternationaler und nationalerReintegrationsvorhaben,

der gesetzlichen Festlegung vonReintegrationsansprchen,einer frhzeitigen Festlegung vonangestrebten Zielgren,von umfassender und verlsslicherInformation der Soldaten,

von bedarfsgerechten Reintegra-tionsangeboten (besonders auch frweibliche Ex-Kombattanten),

von psychotherapeutischer Unterstt-zung von Kriegsteilnehmern und

des nachhaltigen Aufbaus nationalerInstitutionen fr die kontinuierlicheReintegration von Soldaten.

Verantwortliche und demokratischeSelbstregierung kann nur entstehen,wenn Hilfe zur Selbsthilfe geleistet wird.

Der Bericht schliet mit einemVierstufenmodell der Vorbereitung,Planung, Implementierung undEvaluierung von Demobilisierung undReintegration, dessen Kriterien auch frandere westbalkanische Staaten hilfreichsein knnten.

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This report summarizes the insightsgained and lessons learned from thedownsizing of the armed forces inBosnia and Herzegovina (BiH) in thewake of the Dayton Peace Accords(DPA) of December 1995.

There have been four waves ofdemobilization in Bosnia andHerzegovina since late 1995: animmediate postwar stage in 1995/96;

intermediate downsizing andprofessionalization of military servicesfrom 1997 to 1998; and two externallyfinancedand partially overlappingrounds of demobilization in 1999/2001 and 2002/03 respectively. Thereport is based on projectimplementation reports, officialinformation releases, and interviewsconducted with representatives of theOHR, OSCE, SFOR, IOM, the WorldBank, national NGOs, representativesof the defense ministries of BiHspolitical entities, parliamentarians and

journalists as well as standardizedinterviews with 35 ex-combatants.

The overwhelming majority of soldiersdemobilized were not preparedeitherin terms of skills/education orpsychological assistancefor their post-military life while still in service.Moreover the estrangement betweendischarged soldiers and their entitygovernments and/or militaryleaderships is substantial; to be morespecific, the BiH authorities negligence

in dealing with demobilization has ledto a widespread sense of disempower-ment and demoralization. As yet, thereis no legal basis clarifying theentitlements of ex-soldiers (pensions,severance payments, reintegration andhousing assistance) according to rankand time of servicea fact which isclearly an obstacle to a planned andcontrolled shift from military to civilian

life. Benefit packages could be part ofeither a general Civil Service law (as hasbeen already adopted in BiH) or of aspecific law relating to militaryprofessionals.

Demobilization as such was not part ofthe Dayton negotiation package; it wasneither a stick nor a carrot. But if aninternational protectorate is to be set up,it must have authority overand

resources formilitary affairs. If linkedconditionally to other issues such asinvestment, demobilization could forman essential part of post-war bargaining.From the very outset, the aspect ofdemobilization should therefore forman integral part of the post-warframework agreement to prevent thelikelihood of its being postponed.

With time, the existence of twodefactothree separate armiesturned outto be a heavy burden for economicrecovery and a healthy budget in both

parts of Bosnia and Herzegovina. Ofthe estimated 400,000 to 430,000 troopsunder arms in 1995, some 370,000 leftthe forces over a period of five years.However it was not until 1998 that theinternational community and BiHofficials started to focus on planneddemobilization. By 31 January 2001, thearmed forces of both entities had cutdown their troops to a combined totalof approximately 34,000 active dutysoldiers, supported by some 15,000reservists.

The three major reintegration projectscovered by this report (two World Bankprojects and one run by the Internatio-nal Organization for Migration) allowfor some generalizations:

Demobilization and retraining areresidual strategies that develop out ofSecurity Sector Reform (SSR). Thestrategic policy sequence should cascadedownwards to include economicdevelopment, national security, defenseand intelligence as well as changes inorganizations and personnel. Militarydownsizing is unlikely to succeed unlessit is accompanied by a coherent ArmedForces Restructuring (AFR) policy and

underpinned by wider socioeconomicprograms and strategies.

Prior to discharge, soldiers must receivereliable information about their benefitpackage as well as about retraining,business opportunities and jobplacement services. Instead of justlooking at the immediate cost of post-military benefit packages,demobilization and reintegrationprograms should also analyze theeducational, economic and social needs,customizing assistance accordingly.

Particular attention should be paid tothe most vulnerablethe disabled,veterans, female soldiers, anddependents. Whats more, it is vital todeal with mental illnesses caused by thewarsuch as post-traumatic stressdisorder (PTSD)immediately after theconflict ceases.

The overarching goal of internationalaid and projects must be to create anddevelop sustainable national structures

that can provide employment for ex-soldiers. Additionally, promotion ofsmall and medium-sized enterprises(SME) adds value to society as a whole.With the engagement of internationaldonors in decline, institutional capacitiesbuilt up under the World Bank and theIOM projects should be transferred tothe cantonal employment offices.

Summary

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Introduction and Goals

The following report attempts tosummarize the insights gained andlessons learned from the downsizing ofthe armed forces in Bosnia andHerzegovina (BiH) in the wake of theDayton Peace Accords (DPA) ofDecember 1995. There have been fourwaves of demobilization in Bosnia andHerzegovina since late 1995: animmediate postwar stage in 1995/96;intermediate downsizing and

professionalization of military servicesfrom 1997 to 1998; and two externallyfinancedand partially overlappingrounds of demobilization in 1999/2001 and 2002/03 respectively. Thisreport will concentrate on the micro-management of reintegration,specifically taking stock ofinternationally sponsored reintegrationefforts targeted towards the Serb, Croatand Muslim military forces, as well asminor, locally initiated efforts on thepart of BiHs political entitiesthemselves.

In order to understand the currentsituation, it is important to rememberthat the governments of Bosnias twoethnically divided entitiestheFederation of Bosnia and Herzegovina,and the Republika Srpskadid not setup institutional capacities of their ownto manage demobilization andreintegration. Nor did the warringparties in Bosnia end the violence bythemselves. Instead, the end of the warresulted from the triple effect of

Federation military gains over Bosnian-Serb positions, NATOs militaryintervention, and the marginalizationof the Serb leader Karadzic through thefostering of Milosevic as the authorityable to deliver peace.

No party to the war had an interest inending the violence before the USgovernment forced them to do so. Inthe end, the international community,led by the United States, brokered apork barrel solution, offering to trainand equip the Federation army if a peace

accord materialized. However, as therewas no consensus among the various

ethnic parties as to what kind ofpostwar state they wanted, oncehostilities ceased the role of the armiesremained blurred. The fact that thevarious ethnic groups were notresponsible for ending the warthemselves had a lasting impact becauseit was possible to blame the internatio-nal community for the flaws inherent inboth the Dayton Accords and thereintegration efforts. But, despite this,

the Bosnian experience is of especialinterest precisely because Bosnia andHerzegovina belongs to the growingnumber of postwar societies and para-states which experience only limitedinternal and external sovereignty due tothe decision-making authority oragenda-setting power of internationalorganizations.

Apart from providing an empiricaloverview and an evaluation of thecurrent state of demobilization in BiH,this report is written with the

expectation that internationalorganizations, including the EUStability Pact, may derive useful lessonsfrom it in formulating priorities fortheir future engagement in the WesternBalkans. Additionally, national decision-makersmainly cabinet ministers,defense ministries and parliamentsaswell as implementation agencies, NGOs(non-governmental organizations) andthe media may find the yardsticks usedhere to measure reintegration effortshelpful.

The report is interested in pinpointingachievements and failures. It specificallyasks:

To what extent do politicalframework decisions by the interna-tional community, as well as nationalauthorities, provide adequateguidance for demobilization andreintegration?

What are the major retraining andreintegration measures?

Does the demobilization meetmeasurable outcome criteria such astransparency, accountability, andpredictability, successful retrainingand job placement of ex-soldiers, aswell as the affordability of armedforces?

Are the institutions andorganizations in charge of thedemobilization and reintegration

process fulfilling their assigned tasksefficiently?

Are the institutional capacitiessustainable as regards the futurepersonnel policy of the armedforces?

Do institutionalized feedback andmonitoring mechanisms exist?

What do ex-soldiers identify as theirneeds, and what do they think of theassistance received?

Can any practices be recommendedfor the design of other reintegrationprograms or flaws avoided?

The general tasks involved indemobilization and reintegration ofarmed and paramilitary forces are well-known from other cases: disarming;retraining; job creation; housing;support of small and medium-sizedenterprises (SME); social reintegration;psychological assistance; and re-

socialization of combatants. But it isour aim here to see how theseambitions have been implemented andwhether there is anything new to learnfrom the Bosnian case.

Why demobilize?

The military legacy of state socialism,coupled with that of the Balkan wars,has put a particularly heavy burden notonly on post-war governments in theWestern Balkans but on their societies atlarge. As a result of this dual legacy, thearmed forces of the Western Balkan

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countries are still substantially oversized.While Central Eastern Europe hasachieved major cutbacks over the last 10to 15 years, the states of the WesternBalkans still have to determine theultimate size of their armed forces.Military expendituresabove allpersonnel costsrepresent a seriousobstacle to achieving reasonable andsustainable state budgets. Moreover, themaintaining of armed forces over andabove those adequate for functionallydetermined tasks contains the risk of arelapse into violent nationalism.

Oversized armed forces can also lead toa well-known security dilemma: onesown defense outlays are legitimized bythe respective behavior of neighbors,and vice versa. Furthermore, the waydownsizing is administeredeither in aplanned or chaotic manneraffects thediscipline, confidence, and morale ofmilitary personnel. It is feared that(ex-)soldiers who are not adequatelyintegrated into society could become arecruiting ground for criminalorganizations or get involved in the

black market.

In addition to the potentially negativeeffects resulting from inefficientdownsizing mentioned, sustainingarmed forces beyond a reasonable andsufficient number inhibits thedemocratization of civil-militaryrelations. Without downsizing, themilitary remains a state within thestatein post-socialist societies, anisland of socialism in a democratizingenvironment. The need to demobilizetherefore goes beyond mere damage

control and assisting a sociallyvulnerable group; it is both an end initself and a prerequisite forconsolidating the transition tobecoming an integrated Europeandemocracy. To this extent, downsizing isa key factor for the Western Balkan

countries prospects of rapprochementwith the European Union, both infinancial terms and with respect toconfidence-building.

This report is mainly based on projectimplementation reports, officialinformation releases, and interviewsconducted with representatives of theOHR (Office of the HighRepresentative (UN) ), OSCE(Organization for Security and Co-operation in Europe), SFOR (NATO-led Stabilization Force Bosnia and

Herzegovina), IOM (InternationalOrganization for Migration), the WorldBank, national NGOs as well asrepresentatives of the defense ministriesof BiHs political entities,parliamentarians and journalists (see fulllist in the annex). Furthermore, 35standardized interviews were conductedwith ex-soldiers in the Bosnian-CroatFederation (10:15) and in the RepublikaSrpska (10).

AcknowledgmentsWe would like to thank all personsinterviewed, as well as our cooperationpartners, for the time they took toanswer our questions and for theadditional material provided. We areparticularly grateful to the Sarajevo-based Center for Security Studies,especially to Denis Hadzovic and itsdirector, Dr Bisera Turkovic, and toDragan Stanimirovic as well as ColonelPearse McCorley for helping to set up

contacts or for conducting thestandardized interviews. Colonel ShayDuffy initiated this project on behalf ofDCAF and participated in some of theinterviews; without his countryknowledge, networking experience,persistence, and good spirits the projectwould have never materialized. It goeswithout saying, however, that only theauthors are responsible for the viewsexpressed here.

Andreas Heinemann-Grder, Tobias PietzAugust 2003

The Geneva Centre for the Democratic Control of Armed Forces (DCAF)was established in October 2000 on the initiative of the Swiss government. TheCentre encourages and supports states and non-state governed institutions in theirefforts to strengthen democratic and civilian control of armed and security forces,and promotes international cooperation in this field, initially targeting the Euro-Atlantic regions. To implement these objectives, the Centre:

collects information, undertakes research and engages in networking activities inorder to identify problems, to establish lessons learned and to propose the bestpractices in the field of democratic control of armed forces and civil-militaryrelations;

provides its expertise and support to all interested parties, in particulargovernments, parliaments, military authorities, international organizations, non-governmental organizations, academic circles.

Geneva Centre for the Democratic Control of Armed Forces (DCAF)Rue de Chantepoulet 11P. O. Box 1360CH-1211 Geneva 1, SwitzerlandTel: +41 (0)22 741 77 00Fax: +41 (0)22 741 77 05E-mail: info@dcaf.chURL: http:/ /www.dcaf.ch

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The legacy of thewar and thespontaneousdisintegration of troops

During the war in Bosnia andHerzegovina (19921995), notonly most of the male population butseveral thousand women as well weremobilized into Serb, Bosnian-Muslim,

and Croat forces. In the course of theinterethnic fighting, there were threearmies in existence in Bosnia andHerzegovina: the Bosnian-Muslimforces (ABiH), the Croatian DefenseCouncil (HVO), and the Bosnian-SerbArmy (VRS), each consisting of regular

soldiers, paramilitaries and young manand woman drafted on anad hocbasis.Although these three ethnicallyseparated military cohorts were an off-spring of the army of the FederalRepublic of Yugoslavia (JNA) and theterritorial defense force of Bosnia andHerzegovina, a substantial part of themcould thus barely be considered regulararmed forces. The core of the armedforces consisted of soldiers originally

trained by the JNA, but theseprofessionals and recruits weresupported by external soldiers,paramilitaries and mercenaries as wellwarlords, marauders, and criminals.Defacto, not all of the enlisted soldierswere on active duty. At the beginning of

the war, for example, only slightly morethan half of the ABiH forces had accessto military equipment.

While some estimates suggest that atotal of 400,000 to 430,000 people wererecruited for the war effort, estimatesmade by the International Institute forStrategic Studies (IISS) and the WorldDefence Almanac (WDA) areconsiderably lower, at 175,000 to

227,000 (see Figure 1). The latterestimates, however, were based onnumbers relating to real armies thatcould be clearly identified, that is,additional groups of paramilitaries orweekend-fighters were not included.

Background

FFFFFigure 1: Military forces in Bosnia and Herzegovina, 19922003

Various estimates

Sources:International Institutefor StrategicStudies (IISS), The Military Balance(Editions 1992/93 to 2002/ 03);World DefenceAlmanac(WDA), Military Technology(Editions 1992/93 to 2001/ 2002)

Serb Muslim Croat Federation Armed Forces (as of 1999)

IISS WDA IISS WDA IISS WDA IISS WDA

1992/93 67,000 67,000 3050,000 50,000 50,000 50,000 - -

1993/94 80,000 110,000 60,000 - 50,000 60,000 - -

1994/9580,000 110,000 110,000 - 50,000 50,000 - -

1995/96 75,000 - 92,000 35,000 50,000 49,000 - -

1996/97 85,000 35,000 92,000 90,000 50,000 50,000 - -

1997/98 30,000+ 45,700 40,000 90,000 16,000 50,000 - -

1998/99 - 45,700 - 90,000 - 20,000 - -

1999/2000 - 45,700 - (31,363) - (13,673) - 45,000

2000/01 30,000 45,700 30,000 (19,345) 10,000 (8,500) - 27,845

2001/02 14,000 - (16,800) - (7,200) - 24,000 -

2002/03 6,600 - (9,200) - (4,000) - 13,200 -

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In April 1994, the VRS consisted ofroughly 100,000 men33,000professionals, 63,000 recruits, 4,000volunteers, Special Forces from Serbia,and 1,0001,500 mercenaries fromRussia, Ukraine, and Bulgaria (Calic,1996, p. 99). From 1994/95 onwards,the HVO commanded some 45,000regular soldiers, supplemented byroughly 4,0005,000 volunteers and15,00020,000 further men seconded bythe Croatian Army. When hostilitiesceased, the ABiH consisted of some90,00092,000 troops, in addition to

volunteers from certain Islamiccountries. How many paramilitary forcesthere were is hard to estimate. Even asearly as 1991, nationalist parties hadbegun to form paramilitary forces oftheir own. On the Croatian side theZebras, the Black Legion and theCroatian Defense Union (HOS) mustbe mentioned. The Serb side wasrepresented by the infamous Knindziparmilitaries, the White Eagles, theSerb Cetnik-Movement, supporters ofCaptain Dragan (Dragan Vasiljkovic),

and the Serb Voluntary Guard underits leader Arkan (Zeljko Raznjatovic).During the war, some 3,000 Islamicfighters came to Bosnia, most of themforming the El Mujahid battalionwhich was part of the Seventh MuslimBrigade of the ABiH. Of theapproximately 12,000 Bosnianpassports distributed to foreignersduring and immediately after the war,some 70 percent reportedly went toforeign mujahedin fighters (Internatio-nal Crisis Group, 2001, p. 11). It wasnot until 1996 that the El Mujahid

battalion, formed by fighters from Iran,Afghanistan and Arab countries, wasdisbanded under US pressure. In theaftermath of 11 September 2001,allegations were voiced that members ofAl Qaeda had found refuge in BiH, butit was not possible to establish exactlyhow many demobilized mujahedinwere still there.

In the period immediately following thewar, it is not correct to talk ofdemobilization but rather of thedisintegration of the armed forces. Ofthe estimated 400,000 to 430,000 troopsunder arms in 1995, some 370,000 leftthe armed forces over a period of fiveyears. With the exception of smallcadresloyal to political parties, paramilitaryformations or the civilian police, mostof the combatants left in the immediateaftermath of the Dayton Accords (DPA)(King, 2000, p. 329). Issues ofdemobilization and reintegration were

handled badly after the signing of theDPA (Interview, G. Day, 20 May 2003).Though the Accords provided apowerful annex dealing with militarymatters, none of the tasks specifiedwere related to demobilization; nor werethere any clear measures agreed uponwith regard to the reduction of forces.The only forces that the conflict partieswere obligated to demobilize were thosewhich cannot be accommodated incantonment/barracks areas . . . .Demobilization shall consist of

removing from the possession of thesepersonnel all weapons, includingindividual weapons . . . . All personnelbelonging to these forces shall bereleased from service and shall notengage in any further training or othermilitary activities (Dayton PeaceAccords,1a, IV, Phase 3, 1995).

Although it was intended that IFORoversee and control the militaryagreements, such oversight did notmaterializevis--visthe demilitarizationand demobilization of combatants.

Instead, demobilization subsequent tothe signing of the DPA was rapid andbogus; often soldiers and combatantshad just to turn in their uniformsbefore being sent home (Interview, G.Day, 20 May 2003). The World Bankestimated that, after six months, (thatis, by June 1996) almost 300,000soldiers or combatants had left thearmed forces: 100,000 from Bosniacunits, 45,000 from the Croatian DefenceCouncil (HVO) and 150,000 from thearmy of the Republika Srpska (World

Bank, 1996, p. 1). This chaotic and rapiddisintegration of the armed forces inBosnia hindered the process ofregistration of former combatants,which is the first critical step in any DDR(Disarmament, Demobilization andReintegration) effort. No internationalorganization assumed a leadership rolefor DDR. To enable a meaningfuldemobilization process to be conductedin Bosnia directly after the war, theOHRas the ultimate sovereign in thecountryshould have had the majorresponsibility for overseeing and

facilitating it (Interview, G. Day, 20 May2003). Nor was the BiH governmentitself in a position to attemptdemobilization, as state-level structuresand capacities simply did not exist.

Hence, after Dayton, dischargedsoldiers were mainly absorbed by localtowns and communities in a kind ofemergency demobilization. Manysoldiers used their pre-war JNAmilitary books which entitled them inmost cases to a tax waiver on one

personal vehicle, tax-free importation ofprivate business equipment, educationcredits, and the use of governmentutilities (King, 2000, p. 330).

By mid-1996, therefore, this left a totalof approximately 150,000 soldiers stillon active duty within BiH. Three yearsafter Dayton, the Croat HVO evencontinued to receive supplies,manpower, and marching orders fromthe Ministry of Defense in Croatia(Woodward, 1998). Of the US $152million spent on the Federation Army

up to 1999, one-third went to the HVOand the other two-thirds to theBosniacs (Muslims). In 1998, the HVOreceived DM 117 million from Croatiaproper, while the army of the RSreceived DM 9.4 million to pay thesalaries of former Yugoslav PeoplesArmy officers and an additional DM18.5 million to educate cadets andstudents at military schools (FBIS DailyReport, FBIS-EEU-1999-0711).

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It was not until 1998 that the internatio-nal community and BiH officials startedto focus on planned demobilization,mainly in reaction to the US-led Train &Equip Program for the armed forces ofthe Federation that had been undertakenin an attempt to balance out existingmilitary asymmetries previously tilted infavor of the Serbs. Budget officialsagreed in February 1999 to reducemilitary expenditure by 39 percent overthe years 1999/ 2000. The Federation, forinstance, had previously spent 36percent of its total budget on military

expenditures. Accordingly, theFederation and the RS further agreed todownsize military personnel by 15percent in 1999, and by another 15percent in 2000. As these cuts applied tothe police forces as well, the policewith few exceptionscould notsubsequently absorb any of thedemobilized soldiers.

By 31 January 2001, the armed forces ofboth entities had cut down their forcesto a combined total of approximately

34,000 active duty soldiers, supportedby some 15,000 reservists. This is equalto roughly 24,000 regulars for theFederation Army (VF) while the RSArmy (VRS) totals 10,000 active dutysoldiers, excluding civilians in theMinistry of Defense or police forces.The Army of the Federation (VF) isfurther divided into a Bosnian-Muslimpart (= VF-B) with some 16,800soldiers and a Bosnian-Croat part (=VF-H) of roughly 7,200 soldiers ).TheVF maintains four corps with a numberof combat arms units, including

motorized infantry, mechanizedinfantry, armored infantry, field artilleryand air defense artillery, in addition toreconnaissance, signaling, engineeringand logistical support units (Fitzgerald,2001). The VF additionally consists of aRapid Reaction Force and an air force-airdefense unit. The VRS (Bosnian-SerbArmy), with 10,000 soldiers, likewisehas four corps and its structureresembles that of the VF. But,regardless of their sizes, it is doubtfulwhether either of the entities armed

forces within BiH is operational.

Thus the legacy of the war left Bosniaand Herzegovina with a number ofmajor problems to contend with. Overtime, the existence of twodefactothree separate armiesturned out to bea heavy burden for economic recoveryand a healthy budget in both parts ofBiH. At brigade-level, the HVO and theABiH, which had fought against eachother during the conflict, remainedcompletely separate for years and would,only in the event of war, fall under thecommand of the joint General Staff.Second, disappointment over the lack

of government assistance, pensiondelays, exclusion from the privatizationprocess, and housing issues, felt moststrongly in 1997/98, led to protests androadblocks, albeit peaceful ones. Finally,though empirical evidence is scarce, theabsence of an immediate andcoordinated postwar demobilizationeffort greatly contributedaccording toJeremy King, a member of the UNMission to BiHto weaponssmuggling; violence towards minoritiesand returnees; the movement of

Bosnian-Muslim combatants toChechnya and Kosovo; Bosnian-Serbparamilitaries joining the Yugoslavsecurity forces in Kosovo in 1998; andto an exportation of Bosnian-Serbmercenaries to Zaire where they helpedto prop up the regime of PresidentMobutu Sese Seko (King, Dorn andHodes, 2002, p. 10f.).

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In the course of the attempts by theinternational community to controlthe armed forces of the warring factionsin Bosnia and Herzegovina (BiH), threemain phases can be differentiated: theinitial stabilization of the truce;confidence- and security-buildingmeasures among the parties; and,thirdly, endeavors to design a commonsecurity and defense policy for BiH as awhole. From 1995 onwards, severalpolitically and legally binding frameworkagreements have been in existencedefining the role of armed forces inpost-war BiH.

Initial stabilizationof a truce

In contrast to the postwar agreementson Kosovo, the Dayton Peace Accordsof 1995 did not make arrangements forthe concrete demobilization of ex-combatants. Ending the war, separatingthe armies, and preserving BiH as aloose confederation were the drivingmotives of the Dayton negotiatorsnot building a sustainable peace. Theratio of armed forces may have beenfixed at 5:2:2 between the FederalRepublic of Yugoslavia, Croatia, and

Bosnia, with a ratio of 2:1 between theMuslim-Croat Federation and theRepublika Srpska, but at that time thePentagon rejected a provision onimplementation of such a ratio:downsizing armed forces personnel didnot belong to the hard arms controlprovisions of Dayton but wasdesigned rather as a soft confidence-building measure. In short, the IFOR/SFOR mission was not assigned thetask of troop demobilizationwhileany issue not negotiated at Dayton wasfrozen for years.

In his memoirs, Richard Holbrooke,then US special envoy for the Balkansand chief architect of Dayton,characterizes the retention of twohostile armies, the lack of bindingagreements to disarm, and the ensuingprevention of the emergence of a singlearmy as the most fateful flaw of theDPA (Holbrooke, 1998b, p. 554).Whereas Holbrooke blames thePentagon and NATO, Carl Bildt, formerEU negotiator on former Yugoslaviaand first High Representative forBosnia, holds the US determination tocreate room for the build-up of theFederation armies responsible (Bildt,1998, p. 135).

Under Dayton a large number ofdifferent organizations were involved:IFOR was tasked with military peace-keeping and, if necessary, peace-enforcement (Dayton PeaceAccords,Annex 1-A). The United Nations (UN),on the other hand, were assigned thejob of building up an InternationalPolice Task Force . Finally, the OSCEwas mandated with negotiations onmilitary confidence- and security-building, arms control as well asassistance in the implementation andverification of achieved agreements(Dayton PeaceAccords, Annex 1-B,Regional Stabilization, see Vetschera,2001a, pp. 311318 and Vetschera2001b, pp. 465472). In contrast tomost other peace agreements, Daytonnot only encompasses State Parties butalso the individual political entitieswhich form BiH as well. With Dayton,the Parties committed themselves towithdraw all heavy weapons and forcesto cantonment/barracks areas or otherlocations as designated by the IFORCommander as well as to demobilize

forces which cannot be accommodatedin cantonment/barrack areas (Annex 1-A). Reflecting the mixed nature of

military formations, the term forcesdid not just pertain to regular armedforces, but to the military police andspecial police units too. The Annex 1-Bof Dayton, entitled Agreement onRegional Stabilization, and particularlyits Article IV on sub-regional armscontrol, pertains to the control of heavyweapons, namely battle tanks, armoredcombat vehicles, artillery, combat aircraftand attack helicopters, but does notspecify numbers of military personnel.

The Article IV agreements on sub-regional arms control were actuallynegotiated after Dayton under theauspices of the OSCE and signed on 14June 1996 in Florence (the so-called

Florence Agreement). Theseagreements involved the state of BiH,the Republika Srpska, the Federation ofBosnia and Herzegovina, Croatia, andthe Federal Republic of Yugoslavia. Asregards limitations on the personnel oftheir armed forces, the Parties onlyagreed to voluntary reductions. Article Vagreements of theDayton PeaceAccordsforesaw a Regional Arms ControlAgreement with the goal ofestablishing a regional balance in andaround the former Yugoslavia.Whereas the arms control measureswere largely imposed upon the warringparties, establishing a future regionalbalance was left to the discretion of theregional actors, yet without setting eithera timeframe or target goals. TheFlorence Agreement even set ceilingsfor the non-Serbian parties in BiH muchbeyond their actual holdings, thusallowing for a controlled armsacquisition.

Framework Decisions

The Dayton Accords andFollow-up Agreements

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Confidence- andsecurity-buildingmeasures

Negotiations on confidence- andsecurity-building measures (CSBM) inBiH under Articles II and IV ofDayton as well as the ViennaDocument on CSBMs (of 1994)commenced in December 1995 underthe chairmanship of the OSCE andforesaw, among other matters,restrictions on military deployments;

restraints on the reintroduction offoreign forces; the withdrawal of forcesand heavy weapons to cantonment/barracks areas; and notification ofdisbandment of special operations andarmed civilian groups. The resultingArt. II/ Vienna Agreement of 26January 1996 aimed at achievingopenness and transparency in the armedforces, prevention of unintendedescalation, and promotion of militarycooperation between the two entitiesand the State of BiH, but it did not

prescribe any limitations to the amountof military personnel deemed acceptable(for more details, see Vetschera 2001a, p.314).

If IFOR early on acknowledged theimportance of the demobilization ofremaining forces, in the absence of ademobilization and reintegrationscheme, however, the responsibility foremergency demobilization largely fellfirst to the entities and localadministrations themselves and secondto other international organizations. A

further flaw of Daytonwith seriouslong-term consequencesconsisted inthe duplication of competency withregard to security under the Office ofthe High Representative (OHR) andIFOR (later SFOR), both actingindependently of the ultimate nationalpolitical decision-makers. As former EUnegotiator on former Yugoslavia andfirst High Representative for Bosnia CarlBildt recalls, the Europeans hadpreferred a strong High Representative,but the US negotiators were merely

concerned with military aspects and theneed to get out of Bosnia as soon aspossible (Bildt, 1998, p. 385).

The Train & EquipProgram

In the face of deep mistrust towards theSerbs, the option of supporting themilitary build-up of the Federation waskept open throughout the negotiationsprior to, and during, Dayton. Strategicconsiderations of the United States andthe European Union had been crucial todiplomatic efforts during the last stageof, and in the period directly after, thewar. As of August 1995, the Clinton

administration pursued a policy ofbacking Croatian military efforts in orderto unblock the diplomatic stalematewith Milosevic (Holbrooke, 1998b, p.124). Part of this general approach wasan offer by the US government to armand train the armed forces of theMuslim-Croat Federation if a peaceaccord materialized (Holbrooke, 1998b,p. 126). This asymmetry in the approachof the United States, accepted for themost part by the Contact Group,favored the military of the Muslim-Croat Federation: the Croat military inBosnia could expect to be rewarded forits war efforts. Thus, in order to makeDayton agreeable to the Muslim-Bosniacs as well, the US delegationoffered, among other things, to trainand equip their army as well. As forNATO, it declined to take responsibilityfor drastically reducing the three armedforces and merging them into one singlearmed force under central command. Inthe end, the Train & Equip Program(T&EP) was combined at Dayton withan Annex on arms control (Annex 1 B).

The question of whether Bosnias levelof armaments should be reduced orupgraded represented one of the mosthighly disputed issues within the USadministration and subsequently duringthe Dayton negotiations as well. Afterthe signing of Dayton, the US $500million-T&EP started in early 1996under the leadership of the USdiplomat Jim Pardew, incorporatingcontributions from Egypt, Turkey,Malaysia, and the United Arab Emirates.

The T&EP lasted for six years andinvolved training intelecommunications, use of artillery andflight along with the donation of 45battle tanks, 85 armored personnelcarriers (APCs), 15 helicopters and 116howitzers by the United States. Thelegitimizing idea was to balance Serbmilitary advantages, to sever Muslim-Bosniac cooperation with Iran, and tofoster Muslim-Croat militaryintegration. The private Americancompany Military ProfessionalResources Incorporated (MPRI) was

the main agency for implementing thetraining componentactually the samecompany that had trained the Croatianmilitary before and during its offensiveagainst Serb-held territories in Bosnia in1995 (OConnor, 1997).

The T&EPdefactoclosed the gapbetween actual holdings and permittedceilings; it encouraged tensions betweenthe Croat and Muslim components ofthe armed forces to be overcome, gaveshape to a common Ministry of

Defense, alleviated military imbalancesbetween the entities, and ostensiblycontributed to the spread of democraticideas within the military community(Vetschera, 2001b, p. 467). Within theconfines of the Dayton Agreement,however, the T&EP came under critiquefrom various different angles for beingtoo expensive, not efficient andparticularly for remilitarizing theFederation.

External promotion of

a joint security anddefense policy

From 1996 onwards, the OSCEMission in Sarajevo began to organize aseries of seminars with the Parties tothe Art. II/Vienna Agreement (onConfidence and Security BuildingMeasures), namely the militaryrepresentatives within BiH, fromCroatia and from the Federal Republicof Yugoslavia. Specifically, the OSCEPersonal Representative for Art. II

initiated a widening of the agendabeyond the original scope of the Art.II/Vienna Agreement. This was aimed

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at the development of a joint securityand defense identity for BiH as a whole,including, most notably, a joint militarydoctrine. Following a PIC resolutionand OHR engagement, institutionalexpression of these endeavors was theestablishment in June 1999 of theStanding Committee on MilitaryMatters (SCMM) as a working body. Inits interaction with the Ministries ofDefense of the two entities, the OSCEstressed that, for an army to beoperational, military expenditures muststrike a balance between (1) personnel,

(2) operations, and (3) procurement,maintenance, and other outlays, witheach area receiving roughly one-third ofthe expenditures. Additionally, at itsmeeting in May 2000, the Peace Imple-mentation Council (PIC)whichcomprised 55 countries and was themain body for implementingDaytonextended SFORs mandateto include the development of militarydoctrines, the restructuring of thearmed forces of the two politicalentities, and the creation of joint

institutions at state level.

As of 2001, US General John Silvester,then commander of SFOR, began topress for the commencement of aprocess of unifying Bosnias armedforces. However, by spring 2003,SFORs Joint Military Affairs committeewas gradually forced to acknowledgethat it was unlikely that a unifiedBosnian army would emerge in thefuture, but rather a combination ofthree ethnic brigades under one JointCommand. Currently, SFOR itself sees

its role in advising the Bosnian parties,leaving the pressure to implementdecisions to the Office of the HighRepresentative (Interview, F. Matser, 26March 2003).

Major obstacles to the development ofa joint security and defense policy are tobe found in the form of war memories,the dominance of nationalist parties inCroatia (until 2000) and the RepublikaSrpska (until 1999), tensions betweenMuslims and Croats in the Federation,

andabove allin the weakness of thecentral state authorities established

under Dayton. It was thus not untilspring 2003 that the coordination of theentities security and defense policy bythe SCMM gradually began to takeshape. For some time, the militarycommand of the RS had rejectedNATOs recommendations for a jointdefense ministry at state level but morerecently willingness to cooperate hadimproved (Southeast European Times, 26August 2002).

Mandated by the Peace ImplementationCouncil decisions of May 2000, the

OHR had taken the lead in promotingstate-level security and defense policy inBiH. Through the adoption of the BiHDefense Policy in May 2001 by BiHscollective Presidency, a respective basiswas laid. In spring 2002, the MilitaryCell of the OHR drafted a SecurityPolicy for BiHs Council of Ministers,requesting a strengthening of state-levelinstitutions. As a result, since thebeginning of 2003 the StandingCommittee on Military MatterstheDayton institution aimed at bringing

together the defense establishments ofthe two entitieshas been in theprocess of capacity building.Theoretically this institution may turninto the body which develops acommon understanding of security anddefense policy in BiH. Furthermore, theprospect of BiHs inclusion intoNATOs Partnership for Peace (PfP)has become a strong incentive forforming a joint command. NATOformulated four conditions which BiHwould have to meet before it could jointhe PfP: democratic control over the

armed forces at state level; establishmentof a security and defense policy at statelevel; command and control at statelevel; and full transparency of budgets(Zukanovic, 2001). However, theparliaments of the two entities wouldstill have to approve decisions becausedefense policy lies within thecompetency of the respective entity. Oneidea is to form the Joint Commandaccording to the tripartite scheme of thePresidencyif a Serb occupies the chair

of the Presidency, the Secretary Generalof the SCMM is a Croat and the Chiefof the Joint Command would be aBosniac. Further support for suchdevelopments has once more comefrom outside: in May 2002, the HighRepresentative formed a working groupon the reform of the defense system inBiH while, from spring 2003 onwards,the international community in BiH hasbeen pressing for a joint command forthe armed forces of the entities at thenational level.

Finally, in May 2003, the OHRestablished a Defense ReformCommission of Bosnia andHerzegovina whose task was to ensureEuro-Atlantic standards for BiHs entryinto the Partnership for Peaceprogram. These included: democraticcivilian oversight of the armed forces;the responsibility of BiHs Presidencyfor protecting sovereignty and territorialintegrity; the sole responsibility of thestate to deploy armed forcesinternationally; interoperability of

defense structures throughout Bosniaand Herzegovina; and budgetaryaffordability (OHR, 2003).

The social and economiccontext in BiH

Eight years after the signing ofDayton, Bosnia has still not fullyrecovered from the impact of the war.Even if there had been no war, BiHwould still have been faced with thechallenges and problems of economic

transition from socialism to an openmarket economy (World Bank, 2002, p.2). But the war and the establishmentthereafter of twoordefactothreeseparate entities greatly increased theburden and the challenges Bosnia hadto face (UNDP, 2002, p. 17). Bosnia andHerzegovina appears to be in a worseposition than almost any other countryin the Southeast Europe Stability Pact(SESP) (UNDP, 2002, p. 3): GDPpercapitaplaces it not only 61 percent belowthe EU average and 21 percent lowerthan the world average but even 19percent lower than the average of all theother SESP countries.

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A fundamental problem that affects allstatistical analysis is that the number ofpeople actually residing in BiH is notknown, there having been no censussince the war. Some consider it possiblethat the actual population may be 10percent lower than official figuresindicate (UNDP, 2002, p. 4). All otherstatistics and measurements such asGDP, unemployment rates, and so ondepend on precise population figures.In addition, the impact of the greyeconomy and invisible money transfersfrom abroad may mean that up to 20

percent more money is being generatedthan the official GDP figures show. A20 percent higher GDP spread over 10percent less population would changethe general picture dramatically. Thissituation would also explain why thevery high official unemployment rate of28.1 percent corresponds to only 19percent of the population living inrelative poverty (KM (Convertible(German) Marks) 1,843per annum),while no one apparently lives in extremepoverty (UNDP, 2002, p. 52).

In the Federation, on the one hand,about 15.6 percent of the populationare living below the poverty line while inthe RS the figure is 24.8 percent. TheGDP in BiH as a whole grew by 5.6percent in 2001, which was mainly dueto a growth of 7 percent in theFederation as the economy of the RSdid not expand much, achieving only a1.9 percent growth (Pschel, 2002, pp.78). The UN General HumanDevelopment Report for BiH arguesthat the total GDP of BiH is probably

higher than this due to cash flows fromabroad of as much as 20 percent ofofficial GDP. According to thecalculations in the HDR, around300,000 BiH citizens have foundemployment abroad and send moneyback to Bosnia every month. Inaddition, small and micro-scalecompanies often do not register theincomes of their employees, oralternatively report such income to be at

the minimum wage level in order toreduce their social insurance obligations.Similarly, small and medium-sizedcompanies lower their annual balancesheets in order to evade sales and profittax. Finally, and last but not least, BiHsgrey market also generates considerableincome (UNDP, 2002, p. 21).

In the field of industrial productionthere is a similar high discrepancybetween the two entities. While theFederation grew by 12 percent in thissector in 2001, the RS declined by 12

percent. In general, industrialproduction appears to be lower than inthe pre-war period though it ismethodologically impossible tocompare the pre-war situation to todaybecause pre-war industries were oftennot resumed following the conflict(Pschel, 2002, p. 8). In 2001, the deficitof the state budget amounted to US $1billion, or one-quarter of GDP of BiH.BiHs external debt had risen to US$2.97 billion by 2000 which equaled 69percent of GDP. At US $1.26 billion,

the World Bank (WB) is currently themajor creditor. The debt servicerequirement for 2001 amounted to US$93 million while for 20022004 it willincrease to around US $170 millionperannum(Pschel, 2002, p. 10). Given thecurrent state of the Bosnian economy,foreign direct investment (FDI) is seenas the only possible way of reviving it.So far, only KM 835 million (835million Convertible (German) Marks)of FDI has flowed into BiH and thatwas between 1994 and 2001. Althoughsome economic segments have become

more attractive to FDI, those whoinvest in BiH face a labyrinth of formaland informal rules and regulations at alllevelsstate, entity, canton,municipalitywhich are oftenduplicative or contradictory and createplenty of opportunities for corruption(Pschel 2002, p. 15). One reason whyBiH has been able to cope with low FDIuntil now is because of the high influxof international aid. In the three yearsfrom 1996 to 1999 donors investedaround US $3.5 billion for

reconstruction purposes (UNDP, 2002,p. 17). It is in fact only thanks to this

external support that the governmenthas been able to provide the populationwith public services (Pschel, 2002, p. 9).At the present time, however, the flowof funds from international donors isdecreasing.

Employment andunemployment

Employment is a very difficult area ofanalysis where BiH is concerned. TheGeneral Human Development Report

for BiH offers three different sets offigures (UNDP, 2002, pp. 3436): theofficial ones stemming fromemployment bureaus and statisticaloffices; estimates made by the LivingStandards Measurement Survey (LSMS)of the World Bank, UNDP and DFID(UK Department for InternationalDevelopment); and further calculationsbased on various official figures thatestimate how many people are ininformal jobs. The official figures in1990 indicated that 1,054,000 peoplewere in registered employment in BiH,85 percent in industry (includingagriculture) and 15 percent in the publicsector. By 2001, 633,860 people wereregistered as employed, 75 percent inindustry and 25 percent in the publicsector (not including the armed forcesand the police, which add around 60,000more individuals to the public payroll).At around 30 percent, the number ofemployees in the public sector is higherin the Federation than in the RS. Thenumber of people employed inindustry includes so-called wait-listed

workers who are not really employed inthe companies but kept registered forsocial benefits.

Estimates by the LSMS, however, showthat the official figures are not realistic.For example, some of the self-employed do not register in order toavoid insurance payments. Additionally,employers themselves tend to evadeinsurance payments by not registeringtheir employees. On the other hand,people on the waiting list, who are

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formally employed but do little or noproductive work, inflate employmentfigures: estimates show that around 35percent of workers registered are inreality in economically unsustainablejobs. A further distorting factor is theeffect of the grey market.

Thus, many of those consideredemployed are not in secure or stablejobs but only generate an informalsubsistence income with no labor orsocial rights. Nevertheless, the LSMSestimates offer a somewhat higher

figure for the total number of peoplegenerating some kind of income,namely 920,000. Informal labor ismostly found in agriculture,construction and trade. The PovertyReduction Strategy Paper (PRSP) Team,working under the authority of thegovernment of BiH, has calculated thatout of the overall number of 920,000generating income, about 41 percent inthe RS and 32 percent in the Federationare unofficially employed or working inthe informal economy (Council of

Ministers BiH, Ministry of ForeignTrade and Economic Relations, Officeof the BIH Coordinator for PRSP, 2002,p. 5). According to the LSMS, the overallunemployment rate in BiH equals 22.2percent, including employment in thegrey market, with only a slight differencebetween the Federation and the RS, at21.6 and 23.3 percent, respectively. Thiswould imply that 414,800 persons wereunemployed in Bosnia in 2000. In turn,if one-third of the unemployed weredemobilized soldiersas the estimatesmaintainthat would mean that about

138,000 ex-soldiers were unemployed(UNDP, 2002, p. 38).

From this, it is clear that the traditionalconcept of employment is no longerproving to be an adequate measure forBiH because many individuals findthemselves either linked to formalemployers who pay only social andhealth insurance but do not provide anyproductive work for them to do or toinformal employers who provide workbut no labor rights or social

entitlements. Another particularlyworrying finding of the LSMS is thevery high unemployment rate amongyoung people. While only 9.7 percent ofthe persons in the age group 5060 and13.4 percent of those between 25 and 49are unemployed, 34.8 percent of theyoung people of the ages 1924 arelooking for a job. As a consequence, 14.3percent of the young populationbetween 15 and 25 years of age and 8.5percent between 25 and 29 left BiHbetween 1996 and early 2001, altogether92,000 persons. Certain sources

maintain that 65 percent of youngpeople in BiH today would leave if theyhad the opportunity to do so (UNDP,2002, p. 49).

Refugees and displacedpersons

There are still some 613,700 refugeesoutside Bosnia and Herzegovina, but328,900 of them have secured theirstatus in the host country and are thusno longer potential returnees. Since thesigning of Dayton, 372,200 refugeeshave returned to BiH, most of them(92 percent) to the Federation. 84percent of returnees to the RS wereSerbs, while 73 percent of returnees tothe Federation were Bosniacs and 20percent Croats. Instead of beingreduced, as the international communityhad intended, the ethnic division of thecountry has actually been cemented bythis process. Ethnic groups mostlyreturn to their entity. Internallydisplaced people still constitute a

considerable problem in both entities.At the time this report was written,there are 555,700 displaced people inBiH as a whole, 283,900 in theFederation, 248,300 in the RS, and23,500 in the district of Brcko. All thedisplaced people in the Federation areBosniacs or Croats, while in the RS theyare exclusively Serbs (UNDP, 2002,p. 73).

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In response to a request by thegovernment bodies of the Federationin early 1996, the World Banks Interna-tional Development Association (IDA)designed an emergency project fordemobilized soldiers in both theFederation and the RS. The overallobjective of this program was

to assist economicreintegration of displacedworkers into thecivilian workforcein order toreducetheburden on families, decreasedependency on eventual social assistance, andincreaseeconomicproductivity. Theprimarytarget group is demobilized soldiers.

Secondary target groups includerefugees, warvictims and thedisabled, widows and thegeneral unemployed(World Bank, 1996,p. 3).

When implementation of the EDRPproject commenced, almost 50 percentof the total number of soldiers in bothentities had already been demobilized.In the initial phase of the reductionsunder the EDRP, emphasis was put onthe demobilization of soldiers who hadthe opportunity either to return homeor to resume their former employment,

as well as of those who were in aposition to restart and complete acourse of education that had beendisrupted by the war (World Bank,1996, p. 3). Originally, the EDRP wasdesigned to establish employment forapproximately 35,000 demobilizedsoldiers in Bosnia and Herzegovinathrough training and similar activities.Costs were expected to reach US $20million, with a planned average cost perperson trained and employed of US$500. However, the money received and

actually spent on project implementa-

tion only amounted to US $8.5 million(US $7.5 million from IDA, a US

$400,000 Dutch Grant, a US $300,000Swedish Grant and US $350,000 fromUSAID), of which the Federationreceived two-thirds and the RS the rest.

The design of the project had beenbased on experience gathered by theWorld Bank in other projects addressingthe economic reintegration needs of ex-combatants such as those in Palestine,Nicaragua and Zimbabwe. Furthermore,the project would be based on the WBswork in other transition economies in

Central Eastern Europe where theintegration of displaced workers hadbeen successful (World Bank, 2000, p.3). In addition to this, the project drewon field work undertaken in BiH inFebruary 1996 together with othermissions by the World Bank to BiH inthe same year. In the Federation,implementation of the EDRP started asearly as 1996, but it actually took untilearly 1997 for the project to getunderway in the RS. The reason for thisdelay was the political situation in theRS in 1996 where a large number of

nationalist Bosnian Serb leadersopposed the aims of the internationalcommunity.

InstitutionalarrangementsThe ProjectImplementation Units

To facilitate the project, the World Bankestablished two Project ImplementationUnits (PIU), one in the Federation of

BiH, one in the RS. Both PIUs workedvia so-called extension agents (EA)whose job it was to deal directly with

demobilized soldiers in the regions. Inthe Federation, each of five regions had

its own extension agent, while in the RSthere were three for the three regions.The extension agents were in charge ofidentifying the whereabouts of the ex-soldiers and of supplying them withrelevant information on the project,mostly through announcements innewspapers about initial introductoryworkshops taking place in the regions.The EAs reported back to the PIUs on amonthly basis regarding how many ex-soldiers were still in training oremployment.

Each PIU was established by thegovernment of the respective entity asan autonomous and non-profit-makingagency. Its staff were trained by a teamof consultants from the InternationalLabor Affairs Bureau of the USDepartment of Labor (USDOL). Projectimplementation manuals, based onexperiences gained in projects designedfor American veterans, were adapted tothe realities in Bosnia. While theUSDOL consultants were in charge ofmanagement during the first period of

the EDRP in the Federation, the staffof the PIU in the RS received lesstraining and oversight by the USDOLbecause that part of the project was laterstarting.

It was arranged that the PIUs besupervised by a tripartite Board ofTrustees comprised firstly ofrepresentatives from governmentorganizations (such as the Ministries ofFinance, Defense, Education, Refugeesand Welfare) and secondly of staff from

the respective Employment Institutes

The Emergency

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(EI, often also referred to asEmployment Bureaus); representativesfrom Employers Organizations andUnions constituted the third group onthe board. The boards were responsiblefor approving regulations, policies,procedures and annual budgets for thePIUs. It was also their job to approveproposals and contractual decisionsmade by the PIUs directors. As afurther step, the PIUs initiated theestablishment of Cantonal and Regio-nal Steering Committees. Though thesecommittees had no power to veto

contract proposals, they were meant toprovide input on the suitability ofproposals in relation to theemployment needs of their region orcanton.

Unfortunately, these oversightcommittees did not prove very effective.In the RS, in particular, it turned out tobe very difficult to findrepresentatives who would serve asmembers of the boards on a gratisbasis. In consequence, the World Banks

follow-up project in BosniathePELRPdiscontinued this set-up. Afurther drawback was that, in theaftermath of the war, cooperationbetween the Ministry of Defense(MOD) and other governmentinstitutions was usually very loose,whereasespecially with regard to theselection of beneficiariesclosecooperation would have been helpful(Interview, D. Vuckovic, 15 May 2003).

As far as the institutional set-ups of thePIUs were concerned, noticeable

differences existed between theFederation and the RS. In theFederation, the PIU was only in chargeof managing the World Banksdemobilization and reintegration projectwhereas in the RS an Employment andTraining Foundation (ETF, laterrenamed the Development and

Employment Foundation (DEF) )implemented not only the EDRP butalso a number of other World Bankprojects such as the Public Works andEmployment Project (PWEP) and theLocal Initiatives Project (LIP) (WorldBank, 2002, p. 23). The advantage ofthis for the RS was twofold: at the sametime that cross-referral was facilitated,institutional memory was created andmaintained. The ETF/DEF in BanjaLuka was later also in charge ofimplementing the World Banks follow-up project for demobilized soldiers (see

below). Instead of being closed downonce implementation of the EDRP hadcome to an endas was the case withthe PIUs for all the World Bank projectsin the Federationthe PIUs in the RSexperienced a continuity ofinfrastructure, experience and admini-strative staff (Interview, Z. Miovcic, 14May 2003). Consequently, thecoordination of the World Bankactivities proved to be more difficult inthe Federation than in the RS. Whatsmore, as the ETF/DEF in the RS

enjoyed more autonomy from theconsultants of the US Department ofLabor, such a situationaccording tothe staff of the PIU in the RSencouraged more self-reliant monitoringon the one hand and greater access tothe companies and institutionscooperating with the World Bankproject on the other. Moreover, itenabled the PIU to adjust suggestionsmade by the American consultants tothe realities on the ground in the RS assome of the suggestions wereoccasionally perceived as being too

complex and therefore not applicable toreality (Interview, Z. Miovcic, 14 May2003).

It is also important to point out,however, that some municipalities inthe RS were on a so-called black list inthe first years after the end of the war,which meant that they were notprovided with any assistance under theframework of the EDRP. The reasonfor this was the existence of politicaltensions between some of the fractions

in the RS and the internationalcommunity, briefly referred to above.

Components of theEmergencyDemobilization andReintegration Project

The EDRP consisted of fourcomponents:

Development of an automatedLabor Market Information database(LMI)

Counseling and job-finding services

Education and retraining services

Management assistance

Labor Market Informati-on database (LMI)

The objective of this component was todevelop a LMI that would match theskills of the unemployed workers to thespecific needs of the enterprises thatwere emerging, restarting or expanding.As a final goal, the LMI would beinstalled in all central, regional and localEmployment Institutes of bothentities. The World Bank projectprovided the hardware for the LMI,contracting other organizations todevelop the software. A major concernat the beginning of the implementationof this component was that it wouldnot be possible to reach a consensus onuniformity in system design with theEmployment Institutes (EI) of eachentity at both state and cantonal level

which would adequately represent Croat,Serb and Bosniac interests. Fortunately,a single system acceptable for theindependent use by each EI was indeedagreed upon and developed. The LMIwill allow the future exchange of thesame information on labor andemployment statistics between allregions of BiH. At the time this report

EDRP

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was written, the LMI had been installed,at least by all employment bureaus inthe RS (Interview, Z. Miovcic, 14 May2003).

Counseling and job-finding services

This component was established inorder to develop the capacities not onlyof the Employment Institutes but alsoof the private companies participating inthe scheme to provide employment

counseling and assistance to theunemployed. There was also a specificeffort made to develop services fordemobilized soldiers, refugees and forwork on problems related to post-traumatic stress disorder (PTSD). As adirect consequence of the war, mentalillnesses had increased, especially amongmore vulnerable groups such asdisplaced persons, refugees, orphans,the elderly and demobilized soldiers. 15percent of all people in BiH areestimated to suffer from traumas suchas PTSD, though rates vary according toregion or canton. Neurotic disordersand affective mood disorders accountfor 61 and 14 percent respectively. So far,no data is available on the potentialincrease in murders and suicides due tothese mental illnesses (UNDP, 2002, p.57). PTSD-related problems have animpact on a persons ability to effectivelylook for employment and to maintain ajob. In the RS, psychological serviceswere instituted, covering 229 persons180 male, 49 femaleof whom 41percent tested positively for PTSD.

Respective counseling services were notavailable in the Federation.

Although they had a monopoly on jobcounseling after the war, theEmployment Institutes were initiallynot in a position to provide efficientservices such as training in resumwriting, in the development of job-search strategies and in attending jobinterviews. Thus, before they could besubcontracted to provide such services,the EIs first had to developcorresponding capacities with the helpof the EDRP. The ensuing assistancedid not prove sustainable, however:

once the financial support of the WorldBank had ceased, the job counselingservices of the Employment Institutessimply disintegrated (Interview, Z.Miovcic, 14 May 2003). To date, it wouldappear that most of the EmploymentInstitutes in Bosnia are too bureaucraticand not very efficient in job counseling.Private companies and NGOscontracted for this component showed amuch better performance. Themonitoring of private referral servicesby the PIUs was quite strict: a contractwas only continued if at least 25 percent

of the persons assisted found a job.

Due to the prior lack of capacities andthe excessive bureaucracy, job counselinginitially met with skepticism. Havingsaid this, the actual output was betterthan expected. Of 3,324 clients (2,643 inthe Federation; 681 in RS), 912 gainedemployment after having receivedassistance (678 in the Federation; 234 inRS)a placement rate of about 28percent. Unfortunately, no long-termmonitoring of the participants took

place, so that the placement rate onlyreflected immediate job placements. Forexample, an evaluation of personsreceiving supportthat is, the overallplacement ratewas only conductedonce, namely 120 days after the saidassistance. In contrast, longer-termmonitoring would have provided moreinformation about the projects actualperformance.

Education andretraining services

Under the EDRP, education andtraining services were offered either bysubcontracted vocational training centersor through on-the-job-training.Additionally, certain education ortraining institutions were given funds toprovide short-term retraining programs.As contractors had to verify that therewere reasonable expectations for anincreased demand in the occupationsthey trained for and as contracts wereonly renewed after a certain, pre-

negotiated placement rate of 80 percentof the demobilized soldiers had beenachieved, the training and educationinstitutes weredefactoresponsible forgetting the demobilized soldiers a joban approach that ensured a closemonitoring of the activities. When thePIUs first published a tender forcontractors, the feedback wassurprisingly high. This was possiblypartly because the conditions of theEDRP assistance were especiallyattractive for emerging enterprises, inthat they opened up the way for flexible

and quick opportunities to hireemployees and the chance of pickingonly those with the necessary expertise.Through these incentives, enterpriseswere able to provide services andincrease production with appropriatelytrained personnel earlier than wouldotherwise have been the case (WorldBank, 2000, p. 10).

Altogether 39 contracts relating toeducational training were signed (25 inthe Federation; 14 in the RS), covering

1,233 clients (865 in the Federation; 368in the RS) of whom 916 later foundemployment. The number of peopletrained on-the-job was significantlyhigherthrough 497 signed contracts(307 in the Federation, 190 in RS),18,766 persons were assisted, and thisresulted in 15,380 contracts ofemployment (10,794 in the Federation;4,586 in the RS).

Although the outcome of the trainingwas on the whole very impressive, somecriticism has been voiced. Many of the

contractors provided labor-intensivejobs in reconstruction which onlyreduced unemployment in the short-term instead of contributing to thetransformation of expansive, state-owned enterprises mainly working inthe construction business into smalland medium-sized enterprises whichcould provide long-term jobs in theservice sector. Moreover, apart fromlimited efforts in the RS, most of theprojects funded did nothing to addressthe underlying psychological tensions

and post-traumatic mental illness(King, Dorn and Hodes, 2002, p. 11).

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Management assistanceThe management assistance componentwas funded to provide and financetechnical support and training for thestaff of the PIUs in both politicalentities. As mentioned above, thecooperation partner of the World Bankwas the International Labor AffairsBureau of the USDOL. It assisted inthe development not only ofinstitutional structures but also ofprocedures, controls, and contracts

which met IDA standards. In addition,the American consultants helped withthe compilation of manuals (Interview,Z. Miovcic, 14 May 2003).

Most of the training of the consultantstook place at an early stage in the project,with the USDOL consultants having toinvest a great deal of time and resourcesbefore the PIUs in both entities werefully equipped and staffed. As a result,not only the extension agents (EA) butthe other staff hired at a later point oftime also did not receive the requisite

training in labor market andemployment issues (World Bank, 2000,p. 11).

Achievements ofthe EDRP

In all, the overall number ofbeneficiaries is quite remarkableespecially when the limited resources,the small number of PIU staff in bothentities, and the general political andeconomic situation are taken into

account. The EDRP was successful intraining and providing assistance to23,323 persons, mainly demobilizedsoldiers. 17,208 of theseor 74percentlater found employment. Itmust be remembered that this highplacement rate was achieved in a societywhich was simultaneously strugglingwith the remnants of war and the legacyof a planned economy. But, even morethan this, the EDRP did not just assistex-soldiers, it also helped the Bosniansociety as a whole by improving the

economic situation of ex-soldiersdependents, by benefiting theircommunities, and by increasing the basefor income tax. In its implementationreport, the EDRP stressed that a similarproject, funded by the Bosnian state,could likewise have generated enoughrevenues to support the retraining of30,000 demobilized soldiers per yearbecause each employed ex-soldier wouldgenerate income taxes and socialpayments to the state, whileimprovements within their householdswould strengthen consumption in

general (World Bank, 2000, p. 11). Thetraining itself was ultimately conductedat a much cheaper rate than had beenoriginally planned when the project wasdesigned. In contrast to the originalestimate of US $500 per person, theproject provided assistance (for training,subsidized employment, and so on) atan average of US $352 per individualassisted, in other words almost one-third less than had been anticipated.

The way in which the PIUs had been

structured also proved to be beneficialto the implementation process. Thisheld particularly true for the RS, wherecontinuation and cross-referral wereguaranteed through the setting up ofone PIU for all World Bank projects.The EDRP did much to raise theawareness within companies themselvesthat on-the-job-training was necessaryand that trained employees could have apositive effect on a companys overalleconomic performance. The projectfurthermore helped to introduce newapproaches to job counseling and

encouraged not only private companiesbut also state-owned EmploymentInstitutes to follow new paths.

A significant achievement was surely theclose cooperation between the PIUs ofthe two entities at a time when contacts,cooperation, and even communicationbetween the former adversaries werealmost completely non-existent. Thetwo PIUs met regularly, sharedmaterials, experiences and otherinformation, and also initiated joint

seminars and conferences.

ShortcomingsWhile representatives of both PIUshighlight the good cross-entitycooperation in sharing information,joint projects that might have addressedcommon problems were not pursueddue to political tensions. The PIUs wereefficient in project implementation, butthe steering and monitoring boardswere clearly not optimal (World Bank,2002, p. 23). Although the PIU in theRS offered PTSD counseling services,

not enough was done on this issue inthe EDRP as a whole (King, Dorn andHodes, 2002, p. 11). Post-traumaticstress disorder still presents a majorproblem in Bosnian society (Sawjak,2000). Furthermore, the EDRP did notprovide for sustainabilitydespite theassumption in the World Bankimplementation report that a furtherproject similar to the EDRP could havebeen successfully run by the BiHgovernment as well. The PIUscomplained that economic developmenthad not been promoted in the same

way as the build-up of politicalinstitutions and bureaucracies (WorldBank, 2000, p. 9).

The special needs of female ex-combatants were not the subject of atargeted approach in the initial design ofthe project. In the view of the formerPIU staff members interviewed, thegroup of female beneficiaries was small,not readily identifiable, and thereforenot in need of a special needsassessment (Interview, D. Vuckovic, 15

May 2003). An exception in connectionwith this issue is the assistance providedby one of the agencies subcontracted bythe EDRP, the International CatholicMigration Commission (ICMC). Thisagency established a school for secretarialeducation in the Canton Sarajevo,offering training for about 2,500 femaleex-combatants with a placement rate ofabout 10 percent afterwards (Interview, H.Valier, 13 May 2003).

EDRP

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According to the World Bank itself, afurther shortcoming of the EDRP lay innot providing services for thedevelopment of small and medium-sized enterprises or for appropriatetraining in business skills (World Bank,2002, p. 23). Instead, many demobilizedsoldiers were often merely employed inlabor-intensive areas such asconstruction work which tended to offeronly short-term employment for aslong as international donors funded thereconstruction of the country. In otherwords, the generation of long-term self-

employment was not a specific aim ofthe EDRP (World Bank, 2002, p. 5).

Many international NGOsespecially inthe Federationwere subcontracted toprovide services for the EDRP, such asthe ICMC job counseling mentionedabove. However, had more localproviders been trained and supported,this might have led to the moresustainable development of thecapacities of Bosnian organizationsthemselves. In their implementation

report, the PIUs maintained that themonitoring of contracts with serviceproviders had not been well developedin the early stages, partially due to thefact that consultants who could haveprovided the PIU staff with thecorresponding training had left beforethe hiring of extension agents andcentral office staff had been completed(World Bank, 2000, p. 13).

Due to the very low level of cooperationbetween the Ministries of Defense andthe armed forces of the entities, there

was a lack of information on individualex-soldiers when projectimplementation commenced. Moreover,long-term monitoring of post-militaryreintegration successes was neglected.The PIUs likewise stress that theyshould have received better training indatabase management in order to gatherinformation on why individual personsactually stayed in employment. Suchmonitoring could have led to a betteroverall performance on the part of theproject (World Bank, 2000, p. 13).

Insights gained fromthe EDRP

In both of the entities, cooperationbetween the PIUs on the one side andthe respective Ministries of Defense,Ministries of Labor and the armedforces on the other left much to bedesired. As later became clear,continuous labor market assessment iscrucial, both before and during projectimplementation. Especially during theinitial rapid, uncontrolled phase of

demobilizing military and paramilitaryforces, soldiers were simply dischargedwithout their names being kept on fileor registered for later reintegrationactivities. Had these soldiers beenregistered, this would have been a greatasset for finding and addressingpotential beneficiaries.

Cooperation with small privatecompanies proved to be more efficientthan with large, state-owned enterprises.Even if small companies trained asmaller number of demobilizedsoldiers and employed only half ofthose trained, such instances ofemployment turned out to be morestable and sustainable. The RS inparticular turned down many offersfrom large state-owned companies thatwanted to take a large number ofpersons on board (say: one hundred)although they did not have any work forthem at that time. The money theyhoped they might receive via the EDRPwould thus have boosted thecompanies business without creating

any concrete placements for EDRPclients (Interview, Z. Miovcic, 14 May2003).

During the interviews, it was oftenstressed that SME (small and medium-sized enterprise) development was vitalfor the improvement of the economicand labor market situation. HoweverSME development was not sufficientlyaddressed under the EDRP. At times, alack of entrepreneurial spirit amongdemobilized soldiers and the passiveattitude on the part of both the

employers and the governmentinstitutions responsible for the labormarket resulted in less-than-optimaloutcomes.

As the amount of staff available to thePIUs was limited, the PIUs generally didnot have the capacities to monitorcontracts with service providers. Suchmonitoring of outcomes would haveprovided valuable information forfollow-up projects as well as for thegeneral assessment of performance. Itsoon became obvious, moreover, that

the contracting of too many differentservice providers caused additionalproblems for monitoring and auditing.

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The PELRP of the World Bank wasdesigned to assist thedemobilization and reintegration ofsoldiers being discharged in accordancewith the Madrid Agreement (MA) of

1998. The reduction was intended to beimplemented in two phases15percent in 1999 and another 15 percentthe year after. The overall objective ofthese reductions was threefold: toimprove the budgetary situation, toincrease security within the region, andto strengthen mutual trust between thetwo entities. In fact the PELRP was notlaunched until December 2000 while thefirst contracts with service providerswere only signed in early 2001. BothPIUs began implementation in June2001, that is, almost three years after theentities had signed the Madrid Agree-ment. The reason for this delay inimplementation was because the MODshad not provided the soldiers withinformation about the project prior todischarge. Hence, the PIUs had to spenda great deal of time tracking down ex-soldiers, providing them withinformation, and checking their skillsand needs.

The objectives of the PELRP were:

To provide ex-soldiers with themeans for self-reliant existence andto integrate them into theeconomically active population

To test various different labor marketmeasures aimed at encouragingemployment generation and smallbusiness creation for the benefit ofdemobilized soldiers and localtraining and consultancy firms

(World Bank, 2002, p. 3).

The total caseload of soldiers dischargedbetween 1999 and 2000 reached slightlymore than 12,000, with 7,384 soldiersfrom the Federation and 4,645 from theRS armed forces (Bodewig and

Tomasovic, 2002). The possibility ofreturning to the armed forces sent aparticularly confusing message: leavingthe army was presented as an option,not a necessity, and in fact several ex-combatants did indeed choose toreturn. Even though the Ministries ofDefense of both entities provided listsof all the soldiers discharged in 1999and 2000, the number of potentialbeneficiaries was still very difficult tomeasure. The lists were vetted by SFORfor potential war criminals before a copywas supplied to the World Bank and thePIUs. There was a mixed bag of reasonswhy the PIUs had problemsdetermining the real number ofindividuals eligible: while some hadalready found employment or beendischarged due to disciplinary reasons,others had actually returned to the army;some had become pensioners whileothers had died. Hence, the number ofeligible ex-soldiers was constantlychanging. Furthermore, no datadisaggregated by sex were available. Asof the fall of 2002, 7,926 individuals

5,021 soldiers from the Federation and2,905 from the RShad finally beendetermined as eligible for assistanceunder the PELRP.

The World Bank Project AppraisalDocument envisaged that US $15million would be provided for thePELRP by the InternationalDevelopment Association (IDA). Anadditional contribution of US $1.5million was to be covered by thegovernment of BiH and US $1.01million by the Dutch Trust Fund.Almost two-thirds of this money wasto be spent in the Federation and one-

third in the RS. The upper limit ofmoney to be spent per individual in allthe components of the PELRP was setat between KM 5,000 and 6,000. ThePELRP was designed to be demand-

driven, responding as flexibly aspossible to the individual wishes of ex-soldiers, and was aimed particularly atempowering the demobilized soldiersto become self-reliant. Responding torequests of clients after a year ofrunning the project, the PIUs added anagricultural component.

Institutionalarrangements

When establishing the PELRP, the

World Bank tried to draw on pastexperiences in demobilization andreintegration in Bosnia. For that reason,workshops with project managers frompast projects and from ongoing WorldBank projects were organized in order topass lessons learned from the EDRP onto the PELRP staff. In addition, theteam leader of the PELRP visitedEDRP institutions in the Federationand the RS (Interview, Z. Miovcic, 14 May2003).

As in the EDRP, there are separateProject Implementation Units for bothentities, and the way these wereorganized differed in various aspects.Project implementation in the RS wasmanaged by the Development andEmployment Foundation (DEF) whichwas, and still is, in charge of all WorldBank projects in the RS. In comparison,the PIU in the Federation wasexclusively established to support thePELRP as the former PIU for theEDRP had been closed when the firstWorld Bank project ended.

The Pilot Emergency

Labor RedeploymentProject (PELRP)

PELRP

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The heads of the PIUs were nominatedby the governments of the two entities.Similar to the EDRP, both PIUs workedvia so-called extension agents (EA) whodealt directly with demobilized soldiersin the regions. It was the job of theextension agents to locate thewhereabouts of ex-soldiers and tosupply them with relevant informationon the project, mainly through advertsin newspapers announcing the initialinformation workshops. The EAsreported back on a monthly basis as towhich ex-soldiers were still in

employment or training. While the EAsof the Federation covered allcomponents of the project and dealtwith all clients personally, the PIU in theRS subcontracted extra extension agentsfor the agriculture component becausethey felt that they lacked the necessaryskills and knowledge in that field.Although the PELRP was subdividedbetween Bosnia and Herzegovinas twopolitical entities, both PIUs reportedthat communication and cooperationbetween the units was well developed

and efficient. Every second month therepresentatives of the PIUs held regularmeetings.

Instead of the steering committees atlocal levelwhich had proved ineffectiveduring the EDRPthe PELRP wasguided by a steering committee atgovernment level comprising the coreministries for Labor, Veterans, Defenseand Finance. The responsibilities of thecommittee included program oversight,policy guidance, supervision of projectimplementation, and cross-entity

cooperation. Unfortunately, nocooperation with the Ministry ofEducation took place. Strictly speaking,the Employment Institutes in thecantons and municipalities wereresponsible for job referrals, but theirinternal control and monitoringprocedures were lacking in manyrespects, partly due to the fact that theyreceived financial support from theentity governments without having toaccount for results (Interview, A. Nurak,27 March 2003).

Project componentsAt the time of writing, the PELRP wascomposed of four differentcomponents:

On-the-job-training and employment

Self-employment in agriculture

Self-employment in small-scalebusiness

Institutional education and training

On-the-job-training andemployment

Under this component, it was arrangedthat companies could take demobilizedsoldiers on for up to a year to provideon-the-job-training. Salaries and trainingwere paid by the PIU while employerswere responsible for social insurancecontributions and taxes. The aim wasfor clients to be retained by the

employer after the PELRP-financedcontract had finished.

By September 2002, 1,510 ex-soldiershad received on-the-job-training, 797 inthe Federation and 713 in the RS.According to the World Banks Mid-term Review Team (MTR), most of theformer soldiers were satisfied with thetraining they had received and expectedto have their contracts prolonged oncethey ceased to be subsidized by thePELRP, although some were skeptical(Bodewig and Tomasovic, 2002,

pp. 67). There was