Croatia's Refugee Programs Proceeding, Slowly

UNCLAS SECTION 01 OF 02 ZAGREB 000168

SIPDIS

DEPT FOR PRM: ROLSON
DEPT FOR EUR/SCE: BBELL, JMITCHELL
BELGRADE FOR SCHEEVER
SARAJEVO FOR RMEYERS
SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PREF PGOV HR

SUBJECT: Croatia's Refugee Programs Proceeding, Slowly

Ref: USNATO 0053

Sensitive but Unclassified, Please Handle Accordingly.


1. (SBU) Summary and Comment. Continuing their monthly meetings on
refugee return issues, the Ambassador and other principals from the
international community (OSCE, UNHCR and EU) met with Minister for
Trade, Transport and Development Bozidar Kalmeta February 6 to review
progress. Perhaps the greatest progress is the forum itself: the mon
meetings hosted by Kalmeta allow for concrete discussions on return-r
programs. The International Community (IC) is eager to see the GOC f
its commitment to additional tangible results this year, particularly
complex program to allocate apartments to individuals who previously
received subsidized housing. GOC progress in other areas is signific
GOC has essentially completed the process of returning about 19,000
homes; reconstruction is proceeding steadily with 9,500 houses rebuil
2005; electrical grids and other infrastructure projects are undergoi
significant investment; and the GOC has initiated procedures to deal
some outstanding administrative barriers.


2. (SBU) At the meeting the Minister indicated that 2006 presents a k
opportunity for the GOC to move forward on its housing program, re-
electrification, and other returnee programs, and was optimistic it w
complete its commitments on time. In light of EU accession talks and
impending closure of the OSCE mission, all sides are eager to demonst
progress in return programs this year. The EC is growing impatient w
pace of reforms and emphasized the need to present progress to Brusse
upcoming accession discussions; while Heads of Mission from OSCE and
UNHCR see improvements and say they need to convince their home offic
that the GOC is earnest in helping returnees. Trying to be proactive
return programs, the Minister has the political backing of PM Sanader
faces bureaucratic resistance within the GOC; Kalmeta is committed to
results and his efforts have been bolstered by the October 2005 appoi
of Damir Spancic (former Mayor of Pakrac, with whom Post has a strong
relationship) to the returnee portfolio. Due in part to internal dis
within the OSCE, EC, and UNHCR, progress on the Sarajevo Declaration
(through which the governments of Croatia, Serbia and Bosnia agreed t
cooperate with the IC and each other on setting concrete benchmarks f
refugee returns) appears stalled. Post will continue its engagement
IC and GOC to encourage even greater concrete results.


3. (SBU) In addition to policy-level involvement by the Ambassador, a
regular and intensive consultation on these issues among Embassy, IC
GOC staff at the working levels, nearly all USG programs in Croatia a
the GOC in creating a welcoming environment for returnees. These inc
programs to improve economic opportunity in returnee areas, selection
humanitarian demining sites, supporting domestic prosecution of war c
through training and equipment, bilateral military exercises which in
civic action component, and so on. End Summary and Comment.

Progress, Slowly but Surely


4. (SBU) The GOC has made tangible progress in several key areas. Th
process of repossession of ethnic Serb homes is essentially completed
GOC has facilitated the return of 19,000 homes and only about 50 case
remain. Home reconstruction is progressing steadily: about 9,000 hom
were reconstructed in 2005 alone, and about 4,900 claims remain pendi
The state-owned electricity company (HEP) reports that it invested 34
million kuna ($5.6 million) last year to reconnect about 50 returnee
and envisions nearly doubling that expenditure in 2006 to connect 340
users. In addition, the GOC recently intervened in an egregious case
unsolicited investment of a refugee's home by a temporary user. The
Minister has drafted a standardized procedure for resolution of the 2
such cases that he plans to submit for approval shortly.


5. (SBU) Perhaps more importantly, the forum for discussing these iss
has been institutionalized: the IC meets monthly with the Minister to
both successes and problem areas. In contrast to prior administratio
meetings are constructive, collegial and open. Kalmeta and Spancic
(Kalmeta's new deputy minister, who replaced Assistant Minister Lovre
Pejkovic as the point-person on refugee returns) are proactive and re
oriented and working in good faith to make progress. Both admitted t
they face obstruction from other parts of the bureaucracy but that th
to achieve success. And progress has been recognized: in a recent in
in Serbia, Croatian ethnic Serb MP Milorad Pupovac praised the GOC fo
refugee return programs in recent years, citing resolution of home
reconstruction and repossession, and recent movement on tenancy right

The Way Towards Reconciliation


6. (SBU) Reconciliation is a long-term goal. Towards that goal, the
international community is focused on encouraging tangible results fo
returnees. Most problematic is housing for former tenancy rights hol
program initiated several years ago. The GOC needs to review about 7
claims and is just now allocating the first apartments. With urging
OSCE, the GOC provided apartments to forty-two vulnerable cases in la

ZAGREB 00000168 002 OF 002



2005. Two weeks ago the GOC began the procedure for providing
apartments to another 27 tenancy rights holders. In its meeting with
Minister, the IC emphasized that that the pace of allocation will nee
increase dramatically in 2006 in order to consider the portfolio clos
anytime soon.


7. (SBU) The Minister assured the IC that the process of adjudicating
applications and procuring housing has begun in earnest and was confi
that the GOC will be able to fulfill its commitments for this year.
month's meeting with the IC, he will provide a concrete timeline for
constructing and allocating apartments. Kalmeta noted that the GOC h
immediately available 52 million kuna ($8.6 million) for purchasing
apartments, which includes unused prior-year funding. For 2006, the
plans to spend over 2 billion kuna ($333 million) for reconstruction
refugee issues including re-electrification and infrastructure develo
FRANK