2003: CRITICAL YEAR FOR RETURNS TO CROATIA

C O N F I D E N T I A L SECTION 01 OF 02 ZAGREB 000094

SIPDIS

E.O. 12958: DECL: 01/14/2013
TAGS: PREF PHUM PREL HR PHUM PREL HR OSCEPREF UNHCR OSCE
SUBJECT: 2003: CRITICAL YEAR FOR RETURNS TO CROATIA


CLASSIFIED BY: POLITICAL OFFICER DARREN TAYLOR, REASONS 1.5 (B) AND (D)

SUMMARY
--------------


1. (C) CUTS IN THE INTERNATIONAL COMMUNITY'S PRESENCE AND
CONFIDENTIAL

PAGE 02 ZAGREB 00094 01 OF 02 141716Z
FUNDING IN CROATIA WILL MAKE THIS YEAR CRITICAL FOR REFUGEE
RETURNS. OVER THE NEXT 12 MONTHS, A BUDGET-STRAPPED UNHCR
WILL DRAW DOWN ITS IN-COUNTRY OPERATIONS, REDUCING STAFF BY
60 PERCENT. KEY PRM-AND EU-FUNDED PROGRAMS ARE SET TO SHUT
DOWN. THESE DEVELOPMENTS ARE OCCURRING EVEN AS THE NUMBER OF
RETURNS IN 2002 DECREASED COMPARED TO 2001 LEVELS. THE
INTERNATIONAL COMMUNITY MUST USE ALL ITS LEVERAGE IN THE
CLOSING WINDOW OF OPPORTUNITY TO PUSH THE GOC TO PROMOTE
RETURNS BEFORE THE IMPACT OF UNHCR'S DOWNSIZING AND LOSS OF
KEY PROGRAMS IS FELT. THE BURDEN OF PROMOTING, FACILITATING
AND FUNDING REFUGEE RETURNS IS INCREASINGLY FALLING ON THE
SHOULDERS OF THE GOC, BUT ALL EXPERIENCE ARGUES THAT THE
GOVERNMENT WILL NOT VIEW RETURNS WITH ANY SENSE OF COMMITMENT
OR URGENCY -- PARTICULARLY AS GENERAL ELECTIONS APPROACH.
END SUMMARY.

UNHCR SAYS TIME IS NOT ON ITS SIDE
--------------


2. (SBU) "THE INTERNATIONAL COMMUNITY HAS EXACTLY ONE YEAR
TO MAKE A BIG PUSH ON REFUGEE RETURNS." THIS WAS HOW UNHCR'S
TALENTED CHIEF OF MISSION, OLUSEYI BAJULAIYE, SUMMED UP THE
SITUATION FOR US RECENTLY. THE UNHCR MISSION IN CROATIA IS
PLANNING TO REDUCE ITS FIELD PRESENCE DRASTICALLY AND PHASE
OUT MOST OF ITS RETURN-RELATED ASSISTANCE PROGRAMS BY THE END
OF 2003. FOR THE NEXT SEVERAL MONTHS, IT WILL MAINTAIN A
HEADQUARTERS IN ZAGREB AND THREE FIELD OFFICES IN OSIJEK,
KNIN, AND SISAK, WITH A TOTAL OF ABOUT 80 STAFF. UNHCR'S
STAFF WILL BE CUT BY 60 PERCENT BY THE END OF THE YEAR, WHICH
WILL MAKE IT IMPOSSIBLE FOR UNHCR TO MONITOR REFUGEE
DEVELOPMENTS AND SUPPORT RETURNS THROUGHOUT THE COUNTRY.
CONFIDENTIAL

PAGE 03 ZAGREB 00094 01 OF 02 141716Z
SENIOR UNHCR OFFICIALS, HOWEVER, NOTE THAT THE RETURN PROCESS
IS FAR FROM OVER; THERE ARE CURRENTLY 228,000 CROATIAN SERB
REFUGEES IN THE FRY AND ANOTHER 23,000 IN REPUBLIKA SRPSKA IN
BOSNIA, OF WHOM UNHCR ESTIMATES THAT AT LEAST 30 PERCENT
WOULD LIKE TO RETURN TO CROATIA UNDER THE RIGHT CONDITIONS.


3. (SBU) BAJULAIYE AND OTHER SENIOR UNHCR OFFICIALS
RECENTLY CAUTIONED THAT BUDGETARY SHORTFALLS COULD FORCE THE
MISSION TO IMPLEMENT PLANNED CUTS SOONER THAN INITIALLY
EXPECTED. FUNDING FOR ITS REQUESTED 7.8 MILLION USD BUDGET
THIS YEAR HAS NOT BEEN SECURED. OF THAT AMOUNT, 5.5 MILLION
USD WOULD BE USED FOR PROGRAM ACTIVITIES INCLUDING RETURN AND
REPATRIATION, REGISTERING REFUGEES AND INTERNALLY DISPLACED
PERSONS IN BOSNIA AND THE FRY, PROVIDING LEGAL ASSISTANCE,
AND HANDLING ASYLUM CASES. APPEALS HAVE BEEN MADE TO THE
INTERNATIONAL COMMUNITY FOR FUNDING TO ENSURE THAT UNHCR CAN
SATISFACTORILY CONCLUDE ITS MANDATE FOR CROATIA UNDER THE
DAYTON PEACE ACCORDS.


4. (SBU) TO USE INCREASINGLY SCARCE RESOURCES MORE
EFFICIENTLY, UNHCR HAS BEGUN TO COOPERATE MORE CLOSELY WITH
THE OSCE ON KEY ISSUES RELATED TO REFUGEE RETURNS. UNHCR AND
OSCE MISSIONS ARE PRODUCING JOINT MONITORING REPORTS
REGARDING THE GOC'S PERFORMANCE IN IMPLEMENTING LEGISLATION
AND MEETING SELF-IMPOSED DEADLINES ON REFUGEE-RELATED ISSUES.
THIS GREATER COORDINATION, OFFICIALS AT BOTH ORGANIZATIONS
HAVE TOLD US, WILL HELP THE ORGANIZATIONS MONITOR
DEVELOPMENTS BETTER IN THE FIELD AND TO PRESSURE THE GOC TO
TAKE ACTION ON PROPERTY ISSUES TO CREATE AN ENVIRONMENT
CONDUCIVE TO PROMOTING RETURNS. IN ADDITION, UNHCR HAS BEGUN
CONFIDENTIAL

PAGE 04 ZAGREB 00094 01 OF 02 141716Z
THE PROCESS OF IMPROVING THE CAPACITY BUILDING OF KEY NGOS TO
ALLOW THEM GRADUALLY TO TAKE OVER SOME UNHCR
RESPONSIBILITIES. GREATER COORDINATION WITH UNHCR AND OSCE
MISSIONS IN THE FRY AND BIH IS ALSO UNDERWAY.

PRM AND EU FUNDING ALSO SET TO END
--------------


5. (SBU) AS UNHCR IS PREPARING TO REDUCE ITS ROLE, PRM
FUNDING, WHICH HAS BEEN CRITICAL IN SUPPORTING RETURNS
THROUGHOUT CROATIA, WILL END IN JUNE. PRM'S BUDGET FOR
CROATIA COVERING PROGRAMS FROM MAY 2002 TO JUNE 2003 IS
SLIGHTLY OVER 3 MILLION USD. ENDING THE PROGRAMS PROVIDED BY
PRM'S FOUR IMPLEMENTING PARTNERS -- AMERICAN REFUGEE
COMMITTEE (ARC),CATHOLIC RELIEF SERVICES (CRS),
INTERNATIONAL CATHOLIC MIGRATION COMMISSION (ICMC),AND THE
INTERNATIONAL RESCUE COMMITTEE (IRC) -- WILL LEAVE A MAJOR
GAP IN PROVIDING KEY SERVICES TO REFUGEES. THE SERVICES
INCLUDE GRANTING SMALL-SCALE HOUSING REPAIRS, FOOD AID
PACKAGES, PROVIDING LEGAL ASSISTANCE, AND OTHER HOUSEHOLD
ITEMS AIMED AT PROVIDING IMMEDIATE SUPPORT TO THOSE WHO
RETURN.


6. (SBU) PRM PARTNERS, SUCH AS IRC AND ICMC, ARE ALSO
INVOLVED IN FACILITATING CROSS-BORDER RETURNS FROM BIH AND
THE FRY. WITH THE CLOSURE OF PRM-FUNDED PROGRAMS IN JUNE,
CROSS-BORDER RETURNS WILL BE DRAMATICALLY AFFECTED DURING THE

CONFIDENTIAL

CONFIDENTIAL PTQ7570

PAGE 01 ZAGREB 00094 02 OF 02 141709Z
ACTION PRM-00

INFO LOG-00 NP-00 AID-00 CIAE-00 INL-00 DODE-00 DOTE-00
PERC-00 SRPP-00 DS-00 EB-00 EUR-00 OIGO-00 FAAE-00
FBIE-00 VC-00 HHS-01 H-01 SSA-01 TEDE-00 INR-00
IO-00 LAB-01 L-00 VCE-00 AC-01 NSAE-00 NSCE-00
OIC-02 OMB-01 DHS-00 OPIC-01 PA-00 PM-00 PRS-00
ACE-00 P-00 SCT-00 SP-00 IRM-00 SSO-00 SS-00
STR-00 TRSE-00 T-00 USIE-00 ECA-00 PMB-00 DSCC-00
DRL-02 G-00 NFAT-00 SAS-00 SWCI-00 /011W
-------------- 255021 141710Z /38
O 141657Z JAN 03
FM AMEMBASSY ZAGREB
TO SECSTATE WASHDC IMMEDIATE 9197
INFO EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 02 OF 02 ZAGREB 000094

SIPDIS

E.O. 12958: DECL: 01/14/2013
TAGS: PREF PHUM PREL HR PHUM PREL HR OSCEPREF UNHCR OSCE
SUBJECT: 2003: CRITICAL YEAR FOR RETURNS TO CROATIA

HEIGHT OF RETURN SEASON. MOST IMPORTANTLY, MANY OF THE PRM
IMPLEMENTING PARTNERS WILL HAVE TO CLOSE ONCE THE FUNDING
RUNS OUT. SOME PRM PARTNERS, HOWEVER, WILL CONTINUE TO
RECEIVE FUNDING FROM OTHER SOURCES. THE LOSS OF THEIR
PRESENCE IN POTENTIAL RETURN COMMUNITIES WILL ONLY SERVE TO
MAKE REFUGEES MORE RELUCTANT TO RETURN. MANY REFUGEE
COMMUNITIES HAVE A FAVORABLE VIEW OF THESE ORGANIZATIONS AND
CONFIDENTIAL

PAGE 02 ZAGREB 00094 02 OF 02 141709Z
ARE WILLING TO RETURN BECAUSE THEY HAVE RECEIVED DIRECT
ASSISTANCE FROM THEM.


7. (SBU) ANOTHER KEY IC INITIATIVE THAT WILL BE WRAPPING UP
BY THE END OF 2003 IS THE EU'S HOUSING CONSTRUCTION PROGRAM,
WHICH HAS HAD A MAJOR IMPACT ON RETURNS THUS FAR. THE EU
DESIGNATED 10 MILLION USD FOR THE PROGRAM LAST YEAR FOR THE
CONSTRUCTION OF 1000 HOMES, ALMOST 400 OF WHICH WERE
COMPLETED BY THE END OF 2002. THE REMAINING 600 WILL LIKELY
BE COMPLETED BY THE END OF THIS YEAR. LOCAL EC OFFICIALS
STRESS THAT THE PROGRAM, WHICH WILL AID IN THE EVENTUAL
RETURN OF ABOUT 4,000 REFUGEES, WILL NOT BE EXTENDED BEYOND
THIS YEAR. THEREFORE, THE RESPONSIBILITY FOR HOUSING
CONSTRUCTION AND RECONSTRUCTION WILL FALL SOLELY ON THE GOC,
WHICH ESTIMATES THAT THE TOTAL COST WILL BE UP TO 800 MILLION
USD. GOC OFFICIALS CONTINUE TO STRESS THAT THIS IS A
SUBSTANTIAL BURDEN FOR A COUNTRY WITH AN ANNUAL BUDGET OF
ABOUT 10 BILLION USD.

RETURNS LEVELING OFF
--------------


8. (SBU) THE REDUCTION OF INTERNATIONAL PERSONNEL AND
FUNDING FOR REFUGEE-RELATED ISSUES IS COMING AT A TIME WHEN
ACTUAL RETURNS ARE ALSO LEVELING OFF. IN 2002, AROUND 11,000
REFUGEES RETURNED TO CROATIA. THIS IS COMPARED TO ABOUT
12,000 RETURNS IN 2001, ACCORDING TO UNHCR FIGURES. ONE OF
THE MORE POSITIVE TRENDS NOTED LAST YEAR WAS THE RETURN OF
YOUNGER REFUGEES, IN CONTRAST TO THE USUAL FLOW OF
PENSIONERS. UNHCR ESTIMATES THAT AT LEAST 20,000 REFUGEES
WOULD RETURN THIS YEAR IF THE GOC MADE PROGRESS ON
CONFIDENTIAL

PAGE 03 ZAGREB 00094 02 OF 02 141709Z
REPOSSESSION AND RECONSTRUCTION OF PROPERTY. THIS FIGURE
COULD INCREASE IF KEY ISSUES SUCH AS OCCUPANCY/TENANCY RIGHTS
AND SOCIAL SECURITY ENTITLEMENTS WERE ADDRESSED.

COMMENT
--------------


9. (C) A REDUCTION IN UNHCR'S ROLE IN CROATIA HAS BEEN
ANTICIPATED FOR SOME WHILE. IN JUNE 2002, AFTER HIS CUTOFF
THREAT SHOCK TACTIC, HIGH COMMISSIONER RUUD LUBBERS DESCRIBED
2003 AS THE FINAL YEAR OF UNHCR'S DIRECT INVOLVEMENT IN THE
RETURN PROCESS IN CROATIA. WHAT HAS BECOME INCREASINGLY
APPARENT IN RECENT MONTHS IS THAT MANY OF THE NGOS
IMPLEMENTING UNHCR PROGRAMS WILL BE SEVERELY AFFECTED BY THE
LACK OF FUNDING ONCE UNHCR COMPLETES ITS DRAW-DOWN. THE
ADDITIONAL BURDEN THAT SOME OF THESE NGOS WILL FEEL BECAUSE
OF THE LOSS OF PRM-FUNDED CONTRACTS WILL MAKE IT DIFFICULT
FOR THEM TO SURVIVE IN CROATIA. SOME ARE ALREADY PLANNING TO
LEAVE, WHICH WILL DRAMATICALLY AFFECT THE INTERNATIONAL
COMMUNITY'S ABILITY TO DELIVER SERVICES TO RETURNING
REFUGEES. THEIR DEPARTURE WILL ALSO RAISE DOUBTS AMONG
REFUGEES CURRENTLY IN THE FRY AND BIH OVER WHETHER THEY
SHOULD RETURN.


10. (C) GOC LEADERS FREQUENTLY TELL US THEY WELCOME THE
RETURN OF REFUGEES, BUT THEIR ACTIONS DO NOT SUPPORT THEIR
RHETORIC. THE DOWNSIZING OF UNHCR AND LOSS OF KEY
REFUGEE-RELATED ASSISTANCE PROGRAMS WILL PLACE AN INCREASED
BURDEN ON THE GOC TO PROVIDE CARE FOR ALL OF ITS CITIZENS,
PARTICULARLY THE MOST VULNERABLE. JUDGING BY THE GOC'S TRACK
RECORD, WE SEE NO REASON FOR OPTIMISM.
CONFIDENTIAL

PAGE 04 ZAGREB 00094 02 OF 02 141709Z


11. (C) WE WILL INCREASE COORDINATION WITH OTHER
INTERNATIONAL COMMUNITY PARTNERS TO ACCELERATE THE RETURN
PROCESS WHILE THERE IS STILL TIME. THE AMBASSADOR, ALONG
WITH HIS COUNTERPARTS FROM THE UN, EU, OSCE AND UNHCR, ARE
SEEKING A SECOND MEETING WITH PM RACAN TO GAIN HIS COMMITMENT
TO RESOLVING REFUGEE ISSUES AND TO CLARIFY HOW THE GOC PLANS
TO ADDRESS REFUGEE-RELATED ISSUES IN THE WAKE OF A DECLINING
INTERNATIONAL PRESENCE. WHILE WE WILL KEEP THE PRESSURE ON
HERE, WE WILL NEED EU AND NATO OFFICIALS IN BRUSSELS AND
OTHER CAPITALS TO STRNGTHEN OUR HAND BY SENDING A CLEAR
MESSAGE TO THE GOC THAT EU AND NATO MEMBERSHIP WILL REMAIN A
DISTANT GOAL UNTIL SUBSTANTIAL PROGRESS IS MADE ON REFUGEE
RETURNS. THERE WILL BE AMPLE OPPORTUNITIES TO DELIVER SUCH A
MESSAGE OVER THE NEXT SEVERAL WEEKS WHEN GOC OFFICIALS BEGIN
TO VISIT EU CAPITALS TO PRESENT THEIR CASE FOR EU MEMBERSHIP.
GOC OFFICIALS CONTINUE TO INSIST THAT CROATIA WILL SUBMIT IT
APPLICATION FOR EU MEMBERSHIP BY EARLY SPRING.


12. (U) BELGRADE MINIMIZE CONSIDERED.
ROSSIN

CONFIDENTIAL

>