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Quarrels Over Reconstruction Aid Threaten Bosnian Peace

Prague, Feb. 8 (RFE/RL) - While Europe and the United States quarrel over who should shoulder the bigger burden of rebuilding war-ravaged Bosnia-Herzegovina, the World Bank warns that the fragile peace may break down if visible results of reconstruction are not achieved soon.

The European Union is pushing for a three-way division of costs of rebuilding Bosnia after nearly four years of war -- estimated by the World Bank at $5 billion in the next five years. The EU says the costs should be split evenly among Europe, the U.S. and the rest of the world, which principally means Japan and the wealthy Islamic states of the Gulf.

But the U.S. argues that Europe must shoulder most of the burden for a crisis in its backyard. The U.S. has placed a ceiling of $600 million on its contributions.

Richard Holbrooke, U.S. Assistant Secretary of State for Europe, and chief architect of the Bosnian peace plan, this week downplayed fears that squabbles between the U.S. and Europe are threatening to hold up the crucial reconstruction funds.

Speaking at the World Economic Forum in Davos, Switzerland, Holbrooke said: "The Europeans want the U.S. to contribute more, we want the Europeans to contribute a little more. In an era of budgetary constraints all of us are a little bit troubled by the amount of aid all of us are going to have to contribute."

Reconstructing Bosnia is the joint responsibility of the World Bank and the European Union. The World Bank's acting director for Bosnia, Croatia and Serbia, Michel Noel, worries that squabbles over funding are delaying badly-needed projects.

Noel told RFE/RL in a telephone interview from Washington that "As these discussions occur, projects go unfunded and people suffer." He added that the World Bank does not consider it important where the money comes from, as long as it is raised. Noel said: "Our goal is to fill the need."

The World Bank has already granted $150 million from its own funds for emergency projects. The United Nations High Commissioner for Refugees (UNHCR) is also trying to raise $30 million in donations for an emergency building program while waiting for more comprehensive aid from the EU and the World Bank.

The UNHCR plans to use cash to produce building materials in Bosnia, spawning a small local industry in producing roof tiles, wood, cement and bricks. The UNHCR will use $5 million to import 350,000 square meters of window glass for Sarajevo, where virtually every window has been smashed. This glass will be enough to repair an estimated 50,000 apartments, home to approximately 250,000 people.

The World Bank's projects look further ahead and take a broader approach to getting the Bosnian economy back on its feet. Around 90 percent of the Bosnian population of 4.3 million now survives on humanitarian aid -- and the World Bank wants to help them get back into productive jobs. That will be difficult since industrial output is only five percent of pre-war levels and the infrastructure is almost entirely destroyed or damaged.

The World Bank's Noel emphasizes that there is not a minute to lose. It will soon be planting season and seeds and agricultural equipment must be provided now if farmers are to produce crops this year. Noel says: "The farming program basically does not make sense if we miss the spring season."

Other programs aim to repair or rebuild roads, bridges and tunnels, to restore water supplies and repair the electricity generation and supply network.

A crucial need is re-establishing social welfare payments, such as pensions and unemployment compensation. One emergency World Bank program aims to give all Bosnians a minimum of 30 or 40 Deutsche marks a month of subsistence income. Noel says this is important because once food production starts again, food aid will decline and Bosnians will need to be able to buy food at market prices.

In April, a meeting will be held in Brussels to try to raise $1.5 billion to add to $500 million that countries have already pledged to fund the most urgent programs this year. But Noel says that even countries that pledge money are sometimes slow in turning their promises into actual cash donations. He singled out for praise the European Union, which has placed $80 million on the table, and the Dutch government, which has already contributed $50 million.

Former Bosnian prime minsiter Haris Silajdzic has said Bosnians need to see aid flowing into their country more swiftly. He said quick reconstruction from the ruins of war is a crucial element in ensuring peace in the region.

Noel agrees that "the peace process depends critically on the ability to deliver visible benefits on the ground. If benefits are not visible through the territory of Bosnian soon, this could in fact endanger the peace process itself."

His final word to would-be donor countries is: "The clock is ticking. There is n-o reason to wait. It makes sense to go forward rapidly."