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(E) A New Conflict in Bosnia-Herzegovina? by Brian Gallagher
By Nenad N. Bach | Published  11/3/2002 | Politics | Unrated
(E) A New Conflict in Bosnia-Herzegovina? by Brian Gallagher


Hrvatski Vjesnik (Australia) The New Generation English Supplement 

25 October 2002 

A New Conflict in Bosnia-Herzegovina?

Brian Gallagher

I recently visited the city of Mostar in
Bosnia-Herzegovina (BiH). Mostar is in the Muslim
(Bosniak) - Croat Federation half of BiH, and saw
extensive fighting during the war, first during the
Serbian attack and then in the Croat-Muslim war. The
Croats are numerically outnumbered by the Bosniaks,
who effectively control Federation
state institutions. 

What I found was a real cause for concern; a push for
ethnic hegemony by the Federation government against
the Croats. The Federation government is attempting to
appropriate the country's most successful company,
Aluminij (Aluminium) from the Croats. Disturbingly
still, massive arms dumps have been discovered in
Bosniak East Mostar.

I visited the Aluminij factory. Aluminij was
severely damaged by the Serbs in 1992. The local
Croats rebuilt the company. Currently it employs 850 
people, the company is 60% owned by the workers, the
government having a stake of 35%. 

Aluminij produces 50% of all BiH exports and has
forged partnerships with companies in America and the
EU such as Daimler Chrysler and Fiat and could expand.
This is an incredible feat to have occurred in BiH.
All the more so when one considers that the initial
funding to rebuild the company came from Croatia; the
government and the international community contributed

The importance to the region of Aluminij cannot be
underestimated; 30,000 people are employed directly or
indirectly by the company. Further, revenue for all
BiH is provided by Aluminij’s use of state

Incredibly, the Federation government - and certain of
their international supporters - wish to put this at
risk. They want to takeover the company, claiming
irregularities in its privatisation, and complaining
about its ‘mono-ethnic’ workforce, stating that
non-Croat workers who lost their jobs during the war
have not been re-employed. Mono-ethnic companies in
BiH are as a result of the war; Aluminij is hardly
unique. Other, less profitable ‘mono-ethnic’ employers
are left alone. 

Nonetheless I asked the Deputy Director of the company
about this. He informed me that the company had
complied with the relevant laws on the matter. Many
ex-employees had found other work and therefore
legally Aluminij were not obliged to take them back;
this was all on file. 

He also pointed out that many ex-employees - including
Croats - only wanted their jobs back when it became
known that Aluminij were paying the highest wages in
the country rather than just after the war, when wages
were rather less.

The Federation government avoids mentioning how the
workforce built it up from nothing; giving the
impression that a profitable company was somehow
stolen from BiH in some kind of mafia scam.
Independent audits have sided with the company, much
to the government’s displeasure. The latest audit did
indeed make some criticism over the original change of
ownership and made suggestions over dealing with
ex-employees. But in light of all the relevant facts,
it recommended the ownership structure should stay as
it is; the auditors presumably realising the
government’s agenda to be less than honourable. 
International arbitration is now being advanced.

The Federation's incompetence is demonstrated by the
Kuwaiti investment in a Bosniak factory in Zenica.
Rather than turn it into the next Aluminij, the
investment has come apart due to mismanagement - much
to the fury of the Kuwaitis. Many Bosniaks may loose
their livelihoods. In contrast to successful
Aluminij, the government are not concerned with what
has happened.

The deputy director of Aluminij gave me his opinion as
to what is behind the takeover attempt; the 
government wish to use the profits - currently
reinvested- to pay off pensioners, strikers etc. to
win electoral support amongst its constituency.

There can be no doubt that Aluminij would be destroyed
in the event of a takeover; causing unemployment and
scaring off international investors from BiH. The
effect on Croat-Muslim relations would be devastating
- and unpredictable.

It's no secret that the Croats are the most
economically active group in BiH. It's also no secret
that they do not get much international aid. Furhter,
the intenational community has shown little regard for
Croat views,often acting against them, such as the
notorious 2000 election rule change which
disadvantaged the Croats elected representatives, the
Croatian Democratic Union (HDZ).

Despite all this, Aluminij has flourished and there
are many small businesses in West Mostar and the rest
of Croat Herzegovina, in stark contrast to the rest of
the country. This also illustrates the reason for the
popularity of the HDZ; why should Croats vote for the
poverty inducing policies of the international
community's favoured political parties? 

The international community often justify their
actions by dubious claims that Croat areas are mafia
dominated and run; if true, the mafia are doing a
rather better job than the federation government or
the international community in producing economic

Recently, NATO found a massive quantity of arms in
Bosniak East Mostar in various locations, including
factories. The weapons included approximately 10,000
mortars, illegally produced since the war. The
Federation government - put in place by the
international community in 2000 - obstructed the
investigation into the matter. There are suggestions
that Bosniak leaders have some involvement with the
arms stockpiles. It seems that some people have
different ideas about the uses of factories than the
Aluminij workforce.

Paddy needs to deal swiftly with the conflict in the
Federation. He has identified both creating a good
business climate and dealing with terrorism as
priorities. Paddy should visit Aluminij at once and
lend the company his support; the deputy director of
Aluminij informed me that Paddy is welcome to visit at
any time. This would help reassure both the Croats
and international investors in BiH. Paddy would do
well to examine the reasons for Aluminij’s success,
and replicate it throughout BiH.

If Paddy is serious on terrorism he will need to deal
firmly with the arms issue - no matter who it

A spot of devolution and decentralisation is also
required. Power needs to taken away from Sarajevo and
given to local communities. It could take the heat out
of the current situation. It should also be done in
centralised -and ethnically pure - Republika Srpska;
it would help refugees return if they knew they could
exercise power at a local level.

Longer term, the Croats need an institutional stake in
BiH; the current situation is simply not sustainable,
especially if Croats continue to produce the most
wealth. Croats will not want to subsidise the moribund
BiH state, and it would help prevent the rest of the
country exploiting them. For BiH to survive, it needs
to reach a point where none of the three nationalities
have power over each other.

For the moment, the current political conflict between
Croats and Bosniaks is a very real problem which could
escalate. Paddy needs to resolve it, and soon.
The above article, written exclusively for 'The New Generation' by Brian Gallagher, was written prior to the October elections in Bosnia-Herzegovina.

© Brian Gallagher

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