BOSNIA - PUBLIC ADMINISTRATION REFORM: THE

C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 000654

SIPDIS

SIPDIS

EUR FOR DICARLO, EUR/SCE (HOH, FOOKS, STINCHCOMB); NSC FOR
BEIN

E.O. 12958: DECL: 04/10/2018
TAGS: PGOV PREL BK
SUBJECT: BOSNIA - PUBLIC ADMINISTRATION REFORM: THE
FORGOTTEN SAA CONDITION

REF: A) 07 SARAJEVO 2669 B) 07 SARAJEVO 2414

Classified By: Michael J. Murphy for Reasons 1.4 (B) and (D)

Summary
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1. (C) Public administration reform, an initiative intended
to remedy the systemic dysfunction crippling Bosnia's state
institutions, and one of four requirements for signing a
Stabilization and Association Agreement (SAA) with the EU,
has stalled. Although the EU has determined that SAA
conditionality has been met, little meaningful reform has
been realized. The reform process continues to receive
minimal support from Bosnian political leaders and is
witnessing a rollback as the result of the Republika Srpska
campaign to reclaim state competencies. This lack of
progress has resulted in the preservation of a status quo
under which state level institutions are kept alive by the
international community and the Office of the High
Representative. The current dysfunctional system has been
perpetuated by a near complete disinterest in state
institutions by all sectors of Bosnia's political elites. By
declaring SAA conditionality met, the EU has abdicated one of
the few opportunities to leverage meaningful reform of what
has been described as Bosnia's "virtual statehood." End
Summary.

PAR at a Glance
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2. (U) Public Administration Reform (PAR) continues to
garner little attention from politicians, the media, or the
general public even though it was one of four EU
Stabilization Association Agreement (SAA) conditions for
Bosnia and codified in the European Partnership with Bosnia
(Ref A). The intent behind EU SAA conditionality was for
Bosnia to demonstrate that it is working toward creating a
public administration system capable of adopting and
implementing EU acquis communitaire. However, given its
unwieldy system of multiple governments and lack of
harmonized policies, there are no prospects for the near term
realization of the Bosnian government's stated goal of a
public administration system that is "more effective,
efficient, and accountable; that will serve citizens better
for less money; and that will operate with transparent and
open procedures, while meeting all conditions set by European
Integration."

Background
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3. (U) The state level government has ostensibly been
working to reform Bosnia,s cumbersome public administration
system for almost five years. The initiative was formally
launched in March 2003 when former Prime Minister Adnan
Terzic presented "Public Administration Reform Commitments"
to the Peace Implementation Council. In 2004, a state level
PAR Coordinator's Office (PARCO) was established, and an
ambitious paper strategy to reform the country's public
administration was devised under OHR,s guidance. OHR
subsequently pulled out of the PAR initiative after EU
insistence on assuming leadership of the process. In
September 2006, entity and state governments adopted a
comprehensive strategy aimed at reforming public
administration largely at the state level.

PAR,s Nuts and Bolts
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4. (U) The PAR strategy was intended to focus on six areas
of reform: Policy-Making and Coordination Capacities, Public
Finance, Human Resource Management, Administrative Procedure,
Institutional Communication, and Information Technology (IT).
Among other goals, these pillars were intended to address
the need to develop strategic planning, policy coordination
and monitoring within and between ministries; create strong
links between policymaking and budget preparation; harmonize
accounting standards nation-wide; and introduce Internal
Control and Audit. An action plan, included as an annex in
the PAR strategy, laid out specific steps to be taken,
timelines, and responsible institutions in three phases: the
short-term (from 2006 to 2007); the medium term (from 2008 to
2010),and the long-term (from 2010 to 2014).


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Donor Assistance
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6. (U) A number of donors remain involved in PAR. The EU
continues to take the lead on the initiative and has provided
technical assistance on various projects, such as developing
the Council of Ministers General Secretariat's capacity to
formulate policy and to develop an e-government project.
Other donors include the United Nations Development Program
(UNDP),the UK,s Department for International Development,
Sweden,s International Development Cooperation Agency, the
World Bank, the Government of the Netherlands, Japan, Norway,
and SIGMA (a joint EU-OECD initiative). In addition, the
state government signed a July 2007 Memorandum of
Understanding with the EU, Great Britain, the Netherlands,
and Sweden establishing a PAR Fund with an initial allocation
of 4.5 million Euros.

Steps Taken
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7. (U) Despite this assistance, in its 2007 Progress Report
released November 7, the EU concluded that Bosnia had
achieved only "limited progress" on PAR (Ref B). Although it
highlighted a few successes, the EU report listed numerous
areas for improvement. These include systemic shortcomings
such as the need for Bosnia to properly implement the
strategy; for the PAR Coordinator's Office to reduce its
dependence on foreign assistance; for all state-level
ministries and institutions to acquire the necessary staff
and premises and to continue efforts to consolidate; and for
officials to address "insufficient safeguards against
political interference in public administration."


9. (SBU) Other observers have been even more blunt in their
assessment of PAR. The local, widely respected NGO Foreign
Policy Initiative (VPI) in an April 2006 report questioned
whether "the strategy and its priorities correspond to the
views of the political leadership in BiH or to the general
public's priorities." It pointed out that PAR,s importance
is not reflected in the various governments, budgets, that
there has been no debate on the strategy, and that the public
has little understanding of the process. It concluded that
PAR has become "just another EU integration which needs to be
formally adopted rather than a set of cultural and
institutional rules that require sustained political
commitment over a long period to be successful." During a
January 22 press conference, the NGO Center for Humane
Politics presented details of a study which concluded that
only five percent of the measures of the PAR action plan have
been completed. This stark assessment generated little
coverage in the local media and elicited virtually no
reactions from senior government leaders or politicians.


10. (SBU) Political leaders are attempting to roll back
even the meager progress made to date on public
administration reform. In the past several months, the
Office of the High Representative (OHR) has thwarted the
attempt by Civil Affairs Minister Sredoje Novic to amend the
Civil Service Law to annul 2005 amendments that establish a
transparent, merit-based appointment procedure that is free
from political interference. It is also tracking Foreign
Minister Sven Alkalaj,s proposal to exempt diplomatic
personnel from the Civil Service Law, a move that would
further politicize the diplomatic service, as well as plans
by both entity governments to enact separate non-transparent
procedures for senior civil servant appointments. OHR is
also concerned about political interference in the selection
of a State General Auditor and other appointments.

Comment
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11. (C) Given the lack of commitment to state building on
the part of Bosnian political leaders of all parties, and the
continued need for international intervention to shore up
state level institutions, it was clear from the outset that
meaningful progress on public administration reform would
only be possible insofar as the EU was willing to adhere to
meaningful SAA conditionality. As with police reform, the
EU-led process has resulted in barely a minimum of
superficial progress as sufficient to meet SAA criteria. It
is therefore hard to see how the EU's public administration
reform initiative will soon contribute to making Bosnia a
minimally functional state. End Comment.

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