Affordable Armed Forces in Bosnia and Herzegovina

Background

Since the signing of the Dayton Peace Accord in 1995, defence has been a particularly
complicated issue in Bosnia and Herzegovina. The Accord set up a separate army for each of
the country’s two entities – one in the Republika Srpska and one in the Federation of BiH.
The matter is further complicated in the Federation, where the army is divided into two
“components” based on Bosniac and Croat ethnic lines. While the BiH Presidency has supreme
command authority over the Armed Forces in BiH, the Entities currently maintain control over
their armed force components through the Entity Ministries of Defence.

These armies were maintained to defend each of the three constituent peoples from each
other – not from aggressors outside BiH. The combined armies, known as the Armed Forces in
Bosnia and Herzegovina (AFBiH), maintained 46,000 full-time professionals, with enough
heavy weapons to equip considerably larger forces even after the war. In the absence of
“hard” or imposed arms control measures, the OSCE encouraged “soft” or voluntary measures,
called Confidence and Security Building Measures (CSBM). The AFBiH and their political
leaders were prepared to consider some modest “soft” arms control measures. It was only
after lengthy negotiations that both Entity Governments in 1998 committed themselves to a
demobilisation of 30 per cent, nearly 13,000, during 1999 and early 2001. Subsequently by
the end of 2001 the AFBiH consisted of some 33,000 full-time professionals.

Over time the experience within the Entities of having to conduct proper dialogue with one
another began to create genuine confidence and to produce positive results. During 2001 the
Entity Governments acknowledged that Armed Forces with a combined strength of around
20,000 full-time professionals would eventually be enough for their legitimate security needs.
They agreed to reduce the strength of the AFBiH to this figure by 2005. Even this end state
was somewhat high, for most countries with similar sized populations maintained armed forces
around 10,000 strong.

The Defence Expenditure Review

In February 2001, all parties agreed that the 2000 Defence Budgets for both Entities should be
subjected to external audits in a Defence Expenditure Review. The move was seen as a first
step in improving the transparency of the defence budgets and parliamentary oversight of the
armed forces activities. It was also important that the Entities shared their findings with one
another, in order for the process to be a genuine Confidence and Security Building Measure. In
order to carry out the review, a team of three international auditors was hired, with funding
from the United States, the United Kingdom, Switzerland and Germany.

In early 2002, the Head of the OSCE Mission in BiH made a formal presentation of the findings
to the Entity Governments and Parliaments in the presence of the representatives of the
leading International Organisations. The review confirmed what had been felt intuitively for
some time. While defence budgets were cut gradually since the end of fighting in 1995, the
AFBiH had actually consumed far more resources than their allocations. This had been
achieved by a systematic regime of not paying full salaries, not paying social contributions and
selective and tardy payment of bills. The audit established the true cost of maintaining the
AFBiH, and showed that without drastic changes, the 2002 Defence Budget would be spent by
mid-May in the Federation and mid-August in the Republika Srpska.

The case for large-scale demobilisation was argued strongly, but taking into account potential
security consequences of putting numbers of ex-soldiers onto the streets in an election year.
The bottom line for the Entities was that they could afford only around 13,000 of their 33,000
soldiers, and that their budget had no scope for finding the extra money. The message from
the International Community was that urgent action to demobilise a large portion of the
Armed Forces was overdue and imperative. There was no realistic “do nothing” option. The
message was clear. This was an area where the Entity Governments would get full moral
support from the International Community, which would also help with resettlement and
retraining of the ex-soldiers. However, the local politicians had to start by making the difficult
decisions.

The Decisions to Demobilise

The facts were irrevocable: neither Entity could afford its armed forces. The Federation made
the first move by initiating urgent parliamentary debate. After a protracted and emotional
session, the Federation Parliament decided to quickly reduce the Federation Armed Forces by
10,000. Budgetary pressures also led the Republika Srpska to call for reductions, although the
debate was not as painful, since it came in the wake of the Federation’s groundbreaking
decision.

In April 2002, the Federation began demobilisation by offering severance pay to those who
voluntarily left the army. In the Republika Srpska, the strength was brought down mainly as a
result of officers taking retirement, after the Federal Republic of Yugoslavia stopped funding
the salaries of senior officers. Later, the Republika Srpska also offered severance to volunteers
who agreed to leave the army in late autumn.

Conclusions

By focusing on affordability, the total armed forces strength was reduced in BiH by 13,000
soldiers, by the end of December 2002. The country saved a total of 200 million-KM, and
achieved a total force of 20,000 soldiers – three years ahead of schedule. At the same time
the debate has been opened as to the long-term size and shape of the AFBiH. This has been
assisted by a vigorous campaign of public information, stressing that there is a direct link
between spending too much money on armed forces and not providing enough resources for
public services. Gradually the realisation is emerging that the purpose of armed forces is to
restrain external aggression rather than to protect groups inside a country from their fellow
countrymen. Moreover, the audit and the subsequent defence expenditure review have helped
politicians consider how much of the public revenues really need to be allocated to defence
when there is no external threat. This is especially relevant when NATO/SFOR forces are on
the ground to guarantee the integrity of BiH.

It is now being acknowledged that further demobilisation will be required in 2003. BiH is
beginning to consider a range of issues that affect military budgets. For example, is
conscription in segregated units really the best way to prepare the youth for manhood? In
addition, should money be spent to store and secure vast stockpiles of obsolete weapons and
armaments? This debate is leading to the realisation that defence budgets could be better
spent modernising smaller professional forces, which would aid BiH to become a credible
candidate for NATO’s Partnership for Peace Programme in 2004.