Index

Balkans Security: Current and Projected Factors Affecting Regional
Stability (Briefing Report, 04/24/2000, GAO/NSIAD-00-125BR).

Pursuant to a congressional request, GAO provided information on Balkans
security issues, focusing on: (1) the current security situation in the
Balkans, particularly in Kosovo and Bosnia; (2) the projected security
in the region over the next 5 years; (3) factors in the decision to
withdraw Yugoslav security forces from Kosovo; and (4) how the executive
branch has defined U.S. interests in the region in the National Security
Strategy and public statements.

GAO noted that: (1) despite the presence of two large North Atlantic
Treaty Organization (NATO)-led forces in the Balkans, the security
situation regionwide remains volatile, as many difficult political,
social, and other issues remain unresolved; (2) about 70,000 NATO-led
military personnel were deployed in all five countries in the region,
where they continued to ensure an absence of war in Kosovo and Bosnia;
(3) the international operations in both locations, however, face severe
obstacles in their attempts to achieve their broad goals of promoting an
enduring peace and lasting stability in the region; (4) most
importantly, the vast majority of local political leaders and people of
their respective ethnic groups have failed to embrace the political and
social reconciliation considered necessary to build multiethnic,
democratic societies and institutions; (5) the international community
has not provided the resources to fully staff key elements of both peace
operations; (6) the election of opposition members to Croatia's
parliament and presidency during early 2000 holds out hope for positive
change in the region over time--however, all areas of the Balkans
continue to face major unresolved political, social, and other problems
that will contribute to regional instability over the next 5 years; (7)
these problems will likely require the continued security presence
provided by NATO-led forces; (8) according to a senior Yugoslav official
in Kosovo, Yugoslavia's fear of a NATO invasion was the primary factor
which led Yugoslavia to withdraw its security forces from Kosovo; (9)
this official, as well as senior U.S. and NATO officials, also said that
Russia's diplomatic efforts were important in persuading Yugoslavia's
President to agree to the withdrawal; (10) other factors mentioned by
U.S. and NATO officials included the ability of the NATO alliance to
remain united during the bombing campaign, the impact of NATO's
strategic air campaign against Yugoslavia, and the international war
crime tribunal's indictment of Yugoslavia's President for war crimes in
Kosovo; (11) in the December 1999 National Security Strategy, the
President said that the United States has vital interests in European
stability and important interests in NATO operations in Bosnia and
Kosovo; and (12) the President said that U.S. interests in the Balkans
and Southeastern Europe are abiding because instability there threatens
European security.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-00-125BR
     TITLE:  Balkans Security: Current and Projected Factors Affecting
	     Regional Stability
      DATE:  04/24/2000
   SUBJECT:  NATO military forces
	     International agreements
	     Foreign governments
	     International cooperation
	     Military intervention
	     Military withdrawal
IDENTIFIER:  Kosovo (Serbia)
	     Croatia
	     Bosnia
	     Montenegro
	     Macedonia
	     Yugoslavia
	     Russia
	     NATO

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GAO/NSIAD-00-125BR

Briefing Section I: Background

12

Briefing Section II: Current Situation in Kosovo and Bosnia

24

Briefing Section III: Projected Security Situation in the Balkans

40

Briefing Section IV: Factors That Led to the Withdrawal of Yugoslav Security
Forces From Kosovo

56

Briefing Section V: Selected Issues Related to U.S. and International
Operations in the Balkans

60

Appendix I: Distribution of Ethnic Albanians in the Former
Yugoslavia

72

Appendix II: Bosnia Peace Operation

74

Appendix III: Kosovo Peace Operation

78

Appendix IV: International Civilian Activities in Albania, Macedonia,
Croatia, Serbia (Excluding Kosovo), and Montenegro

82

Appendix V: The Stability Pact

84

Appendix VI: U.S. Military and Civilian Costs for Operations in the Balkans,
Fiscal Years 1992 Through 2000

86

Appendix VII: Comments From the Department of Defense

88

Appendix VIII: GAO Contacts and Staff Acknowledgments

90

Table 1: Estimated Costs of U.S. Operations in Bosnia and Kosovo,
Fiscal Years 1992 Through 2000 86

Table 2: Estimated Costs of U.S. Operations in the Balkans, Except
in Bosnia and Kosovo, Fiscal Years 1996 Through 2000 87

Figure 1: Estimate of Refugees and Displaced Persons Still Seeking Solutions
in the Balkans, November 1999 43

Figure 2: Distribution of Ethnic Albanians in the Former Yugoslavia,
as of February 1999 73

Figure 3: Map of Bosnia 75

Figure 4: Organization of Military and Civilian Operations in Bosnia 76

Figure 5: SFOR Organization 77

Figure 6: KFOR Brigade Sectors in Kosovo 79

Figure 7: Organization of Military and Civilian Operations in Kosovo 80

Figure 8: KFOR Organization, as of January 2000 81

Figure 9: International Civilian Activities in Albania, Macedonia,
Croatia, Serbia, and Montenegro 82

Figure 10: The Stability Pact 84

DOD Department of Defense

KFOR Kosovo Force/International Security Force

SFOR Stabilization Force

NATO North Atlantic Treaty Organization

National Security and
International Affairs Division

B-284872

April 24, 2000

The Honorable Floyd D. Spence
Chairman, Committee on Armed Services
House of Representatives

Dear Mr. Chairman:

Since 1992, the international community has responded to a series of armed
conflicts in the Balkans region by establishing numerous, complex, military
and civilian peace operations there.1 The United States and the North
Atlantic Treaty Organization (NATO) significantly increased the active
participation of their military forces in resolving the region's conflicts
in late 1995, when they deployed the first NATO-led peace enforcement
operation to Bosnia. Their involvement deepened again in 1999 with the start
of the NATO bombing campaign against Yugoslavia and, after Yugoslavia
decided in June 1999 to withdraw its security forces2 from Serbia's province
of Kosovo, with the deployment of another NATO-led peace enforcement
operation3 to the province.

We recently briefed your staff on our analyses of Balkans security issues.
Specifically, we reported on (1) the current security situation in the
Balkans, particularly in Kosovo and Bosnia; (2) the projected security in
the region over the next 5 years; and (3) factors in the decision to
withdraw Yugoslav security forces from Kosovo. You also asked us to describe
how the executive branch has defined U.S. interests in the region in the
National Security Strategy and public statements. This report summarizes the
contents of those briefings.

Despite the presence of two large NATO-led forces in the Balkans, the
security situation regionwide remains volatile, as many difficult political,
social, and other issues remain unresolved. About 70,000 NATO-led military
personnel were deployed in all five countries in the region (as of January
2000), where they continued to ensure an absence of war in Kosovo and
Bosnia. The international operations in both locations, however, face severe
obstacles in their attempts to achieve their broad goals of promoting an
enduring peace and lasting stability in the region. Most importantly, the
vast majority of local political leaders and people of their respective
ethnic groups have failed to embrace the political and social reconciliation
considered necessary to build multiethnic, democratic societies and
institutions. Further, the international community has not provided the
resources to fully staff key elements of both peace operations. For example,
U.N. members have failed to provide the amount of resources the U.N. mission
in Kosovo says that it needs for its work, particularly with regard to
staffing the U.N. international civilian police force. Because of this
shortfall, it is not clear when the NATO-led force in Kosovo can turn over
its public security responsibilities to the United Nations, even though the
force had planned to do so by the end of September 1999.4

The election of opposition members to Croatia's parliament and presidency
during early 2000 holds out hope for positive change in the region over
time; however, all areas of the Balkans continue to face major unresolved
political, social, and other problems that will contribute to regional
instability over the next 5 years. These problems--such as differences over
definitions of what territory and ethnic groups constitute a state and the
difficulties associated with returning refugees and displaced persons to
their homes--will likely take a long time to resolve through political
processes. These problems also will require the continued security presence
provided by NATO-led forces. If progress is not made in resolving these
matters, conditions could evolve that might ultimately lead to an escalation
of violent incidents or armed conflict in several areas of the region over
the next 5 years, including in Serbia, Kosovo, Bosnia, Montenegro, and
Macedonia.

Senior Yugoslav, U.S., and NATO officials said that a number of factors
contributed to the Yugoslav decision to withdraw its security forces from
Kosovo. According to a senior Yugoslav official in Kosovo, Yugoslavia's fear
of a NATO invasion was the primary factor in this decision. This official,
as well as senior U.S. and NATO officials, also said that Russia's
diplomatic efforts were important in persuading Yugoslavia's President to
agree to the withdrawal. Other factors mentioned by U.S. and NATO officials
included the ability of the NATO alliance to remain united during the
bombing campaign, the impact of NATO's strategic air campaign against
Yugoslavia, and the international war crime tribunal's indictment of
Yugoslavia's President for war crimes in Kosovo.

In the December 1999 National Security Strategy, the President said that the
United States has "vital" interests in European stability and "important"
interests in NATO operations in Bosnia and Kosovo.5 The President also said
that U.S. interests in the Balkans and Southeastern Europe are abiding
because instability there threatens European security. Because the United
States has important interests in Bosnia and Kosovo, other issues become
relevant to the deployment of U.S. military forces there, such as the costs
of U.S. military and civilian operations--estimated at $21.2 billion from
fiscal years 1992 through 2000--and the relative contributions of U.S. and
other NATO allies to recent and ongoing military operations.

As of the late 1980s, the former Yugoslavia was a diverse federation of six
republics, comprised of many different ethnic groups that were often based
on religious affiliation. The dissolution of the former Yugoslavia in 1991
led to two sets of extended armed conflict, the first in Croatia and Bosnia
from 1991 through 1995 and the second in and around Serbia's province of
Kosovo from early 1998 through mid-1999.

The warring parties to the conflicts in Croatia and Bosnia--specifically,
Yugoslavia, Croatia, Croatian Serbs, and Bosnia's three major ethnic
groups--were all fighting over control of specific territories tied to each
group's own definition of its state, with some groups fighting for
ethnically pure states. During and after the Kosovo conflict, the local
combatants--Kosovar Albanian insurgents and Yugoslav security forces--had
mutually exclusive goals. While the insurgents fought for the independence
of Kosovo, Yugoslav security forces, most of whom are Serb, fought to retain
Yugoslavia's sovereignty over the province. NATO entered this conflict on
March 24, 1999, when it initiated a bombing campaign against Yugoslavia to
force an agreement that would end Yugoslavia's aggression in Kosovo.

The international community reached agreements with the former warring
parties that ended the conflicts and allowed the establishment of large,
complex peace operations, first in Bosnia and later in Kosovo. Each
operation included a large NATO-led force to enforce the military aspects of
the agreements, as well as a substantial international civilian presence.
These operations were designed, among other things, to assist the parties in
complying with the agreements and to build democratic, multiethnic
institutions.

To address our objectives, we interviewed and reviewed documents from U.S.
and international officials in the United States--as well as from U.S.,
international, and local officials in Europe--and compared information from
them with actual conditions in the region. In Washington, D.C., we obtained
information from the State Department, the Department of Defense (DOD), the
U.S. Agency for International Development, the Central Intelligence Agency,
the embassy of Croatia, a representative of the Serbian Orthodox Church, and
numerous nongovernmental organizations. In New York, we obtained documents
and interviewed officials from the U.S. Mission to the United Nations and
the United Nations.

We conducted three visits to Europe during October 1998, July 1999, and
October and November 1999. During these visits, we obtained documents and
interviewed officials from

· the U.S. Mission to NATO; the U.S. Agency for International Development;
NATO headquarters, including the Supreme Allied Commander, Europe; the
European Commission, and the Stability Pact office in Belgium;

· the U.S. embassy and the United Kingdom's Ministry of Defense in England;

· the U.S. European Command and U.S. Army Europe in Germany;

· the U.S. Mission to the European Office of the United Nations and Other
International Organizations, the U.N. High Commissioner for Refugees, the
U.N. High Commissioner for Human Rights, and other international
organizations in Switzerland;

· the U.S. Mission to the Organization for Security and Cooperation in
Europe and the Organization for Security and Cooperation in Europe in
Vienna, Austria;

· the U.S. embassy in Zagreb, Croatia; the U.S. Agency for International
Development; Croatia's Ministries of Foreign Affairs and Defense; the U.N.
High Commissioner for Refugees; the Organization for Security and
Cooperation in Europe; the U.N. Mission of Observers in Prevlaka (a
territory disputed by Croatia and Yugoslavia); and nongovernmental
organizations in Croatia;

· the U.S. embassy in Sarajevo, Bosnia; the U.S. Agency for International
Development; the headquarters of NATO's Stabilization Force and two of its
three multinational divisions; governments at the national, entity, and
municipal levels; the Office of the High Representative; the U.N. High
Commissioner for Refugees; the Organization for Security and Cooperation in
Europe; the U.N. Mission in Bosnia and Herzegovina; and nongovernmental
organizations in Bosnia;

· the U.S. diplomatic office in Pristina, Kosovo; the U.S. Agency for
International Development; headquarters and regional offices of the U.N.
interim administration mission throughout Kosovo; the NATO-led Kosovo Force
headquarters and five multinational brigade headquarters; Kosovar Albanian
organizations, including the Kosovo Protection Corps; nongovernmental
organizations; Kosovar Albanian political leaders; Yugoslavia's office in
Pristina; and municipal Kosovar Albanian and Serb leaders throughout the
province;

· the U.S. embassy in Tirana, Albania; the U.S. Agency for International
Development; the government of Albania; the headquarters of the NATO-led
Albania Force; the U.N. High Commissioner for Refugees; the Organization for
Security and Cooperation in Europe; the Western European Union; and
nongovernmental organizations in Albania;

· the U.S. embassy in Skopje, Macedonia; the U.S. Agency for International
Development; the government of The Former Yugoslav Republic of Macedonia;
the headquarters of the Kosovo Force support element; the U.N. High
Commissioner for Refugees; the Organization for Security and Cooperation in
Europe; the ethnic Albanian party in the ruling coalition; other ethnic
Albanian leaders; and nongovernmental organizations in Macedonia; and

· the U.S. diplomatic office in Dubrovnik, Croatia, which manages
U.S.-funded programs in Montenegro; the U.S. Agency for International
Development; the government of the republic of Montenegro; the Organization
for Security and Cooperation in Europe; nongovernmental organizations; and
the U.N. High Commissioner for Refugees representative from Belgrade,
Serbia, in Montenegro.

We attempted to but could not obtain visas to travel to Belgrade or other
areas of Serbia outside of Kosovo during our October-November 1999 visit to
the region, a task made difficult by the lack of diplomatic relations
between the United States and Yugoslavia.

Our report includes estimates of the number of people in Bosnia who returned
home to areas controlled by another ethnic group ("minority returns") from
1996 through 1999. In reporting these estimates, we relied primarily on data
obtained from the U.N. High Commissioner for Refugees because, according to
U.S. and international officials in Bosnia, these represent the official
estimates of returns. For 1999, the U.N. High Commissioner for Refugees
reported that 31,234 people had registered as having returned home across
ethnic lines. The refugee agency estimated that 41,007 minority returns had
actually occurred during 1999 based on a comparison of registered and actual
minority returns in selected areas of Bosnia. An official from the U.S.
embassy in Sarajevo told us that the U.N. estimate accurately portrays the
number of minority returns during 1999, while an official from the Office of
the High Representative estimated that the number of minority returns during
the year was much higher, about 70,000 people. Because the data for 1997 and
1999 did not include minority returns to Brcko, Bosnia, we supplemented them
with data from the office of the Brcko Supervisor, which has the special
authority to oversee the return process to the Brcko area.

We also relied on data from the U.N. High Commissioner for Refugees for
numbers of people who became refugees or internally displaced persons as a
result of the Kosovo conflict. According to a February 2000 document
prepared by the U.N. High Commissioner for Refugees, the methodology used in
compiling these data did not extend to systematic recording of population
figures. Figures, where available, were drawn by the refugee agency from a
variety of sources--including community leaders, the
NATO-led force in Kosovo, and the U.N. international police force--and are
estimates only. They should not be taken to represent a consensus among
international or local actors.

Our report also discusses the presence of paramilitaries in Kosovo and
Bosnia. The term "paramilitary" has many different definitions. DOD defines
"paramilitary forces" as forces or groups that are distinct from the regular
armed forces of any country but resembling them in organization, equipment,
training, or mission. Webster's dictionary defines a paramilitary as a group
formed on a military pattern, especially as a potential auxiliary military
force (Merriam-Webster's Collegiate Dictionary, 10th ed. [Springfield, MA:
Merriam-Webster, Inc. 1993]). The U.S. government differentiates between
groups organized to carry out "pausibly deniable activities on behalf of the
state" and locally organized defense groups. People with whom we met in
Kosovo referred to the organized groups of armed Serbs as paramilitaries.
While some U.S. and international officials have said that control of these
groups extends to the Yugoslav leadership in Belgrade, another U.S. official
told us that this link has not been proven. Further, according to a U.S.
official, although SFOR considers armed groups in Bosnia to be
paramilitaries, they do not meet the more restrictive U.S. definition of
paramilitaries, that is, groups organized to carry out "plausibly deniable
activities on behalf of the state."

We conducted our work from October 1998 through April 20006 in accordance
with generally accepted government auditing standards.

The State Department and DOD were provided an opportunity to review and
comment on a draft of this report. The State Department--specifically, the
Office of the President's and the Secretary of State's Special Advisor for
Kosovo and Dayton Implementation (through the Deputy Special Advisor for
Kosovo Implementation), the Office of the Legal Adviser, and selected
country desk officers--provided oral comments. State substantially agreed
with the report and provided technical comments that we discussed with
relevant officials and, where appropriate, incorporated them in the report.

In written comments to our report, DOD said that the report presents a
factual account of the current U.S. involvement in the Balkans but took
issue with our discussion of U.S. national interests. Specifically, DOD said
that our report misrepresented the three categories of national interests by
including "abiding" as a type or category of interest and omitting
"humanitarian and other" interests. We modified the text of the report to
(1) clarify that the three categories of national interests defined by the
National Security Strategy do not include the term "abiding" and (2) more
fully describe "humanitarian and other" interests. DOD also provided
separately technical comments that we discussed with relevant officials and
included in the text of the report, where appropriate. DOD comments are
reprinted in appendix VII.

We also provided a draft of the report to the National Security Council; the
U.S. European Command; NATO's military headquarters; the U.S. diplomatic
office in Pristina, Kosovo; the Kosovo Force headquarters; the U.S. embassy
in Bosnia; the Stabilization Force headquarters; the U.S. embassy in
Macedonia; the Central Intelligence Agency; and selected international
organizations in the region. We received a response back from all of these
organizations, with the exception of NATO's military headquarters. We
incorporated their technical comments, where appropriate, into the report.

Briefing Section I provides background information on the region. Briefing
Section II discusses the current security situation in Kosovo and Bosnia.
Briefing Section III describes the projected security situation in the
Balkans. Briefing Section IV provides information on the factors that led to
the decision to withdraw Yugoslav security forces from Kosovo. Briefing
Section V provides information on selected issues related to U.S. and
international operations in the Balkans.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. We are sending copies of this report to the
Honorable Madeleine K. Albright, the Secretary of State; the Honorable
William S. Cohen, the Secretary of Defense; General Wesley K. Clark, the
Commander in Chief, U.S. European Command, and his successor, General Joseph
W. Ralston; and other appropriate congressional committees. Copies will also
be made available to other interested parties upon request.

If you or your staff have any questions about this report, please contact me
at (202) 512-4128. Other GAO contacts and staff acknowledgments are listed
in appendix VIII.

Sincerely yours,

Benjamin F. Nelson
Director, International Relations and Trade Issues

Background

The Balkans Region

Note: The 1999 conflicts in Serbia and Montenegro were the same event,
specifically, the NATO bombing campaign against Yugoslavia.

Source: GAO based on Central Intelligence Agency maps.

For purposes of this report, the Balkans region is defined as Albania and
five of the six republics that made up the Socialist Federal Republic of
Yugoslavia, hereafter referred to as the former Yugoslavia.7 The five former
republics included in this report are (1) Bosnia and Herzegovina, hereafter
referred to as Bosnia; (2) Croatia; (3) Macedonia; 8 (4) Montenegro; and
(5) Serbia, which includes the two provinces of Kosovo and Vojvodina. In
1992, after four of the republics had declared independence, the two
remaining republics−Serbia and Montenegro−formed the Federal
Republic of Yugoslavia (hereafter referred to as Yugoslavia) as the
self-appointed successor to the former Yugoslavia.9

Ethnic Composition of the Former Yugoslavia and Albania Prior to the
Dissolution of the Former Yugoslavia

Note: These figures are from the 1981 censuses of the former Yugoslavia and
Albania. The 1981 census is considered to be the last reliable census of the
former Yugoslavia.

Source: Central Intelligence Agency.

The three largest ethnic groups in the former Yugoslavia were (1) Serbs,
that is, Slavs who are Eastern Orthodox Christian, specifically Serbian
Orthodox Christian, comprising more than a third of the former Yugoslavia's
population in 1981; (2) Croats, who are Roman Catholic Slavs (about 20
percent of the total population); and (3) Muslim Slavs, who are referred to
as "Bosniaks"10 in Bosnia and some other areas of the former Yugoslavia
(about 9 percent of the total population). 11 These three ethnic groups
lived, and continue to live, mainly in Serbia, Croatia, and Bosnia. As shown
on the map, many areas of Bosnia were ethnically mixed, so that no one
ethnic group was in the majority.

The Balkans region also includes Montenegrins and Macedonians. Both groups
are ethnic kin to Serbs, as they consist of Slavs who are Eastern Orthodox
Christian. Montenegrins generally belong to the Serbian Orthodox Church. 12
Many historians maintain that Montenegrins are Serbs, although the two
groups have distinct identities arising from their different histories of
occupation under the Ottoman Empire. Macedonians belong to a separate
Macedonian Orthodox Church that is not recognized by the Serbian church.
They have cultural links to Serbs, Bulgarians, and Greeks. The latter two
groups at times have claimed that Macedonians are actually Bulgars or
Greeks, respectively, rather than Slavs.

A large minority population of ethnic Albanians also lived, and continue to
live, in the former Yugoslavia, mainly in areas along the country's border
with Albania. They reside in Serbia, particularly in Serbia's province of
Kosovo; Macedonia; and, in smaller numbers, Montenegro (see app. I). Ethnic
Albanians constitute the majority of the population in Kosovo, in some
western areas of Macedonia, and in a small area of southern Montenegro. Most
Albanians are Muslim, but about 20 percent in Albania are Albanian Orthodox
Christian, and about 10 percent in Albania and in Kosovo are Roman Catholic.

S
Note: The European Union recognized Croatia's independence in January 1992
and Bosnia in April 1992. The United States recognized Croatia and Bosnia in
April 1992.

The dissolution of the former Yugoslavia led to two sets of extended armed
conflict, the first in Croatia and Bosnia, and the second in and around
Serbia's province of Kosovo. The first set−the wars that coincided
with the independence moves of Croatia and Bosnia−was a complex,
interrelated series of conflicts. The warring parties to these conflicts
pursued the following strategic goals:

· Yugoslavia, particularly its dominant republic of Serbia, sought to create
a "Greater Serbia" and supported Serb paramilitary and military operations
in Croatia and Bosnia. Croatian Serbs and Bosnian Serbs−with support
from Yugoslavia−fought for and declared states separate from Croatia
and Bosnia. In Bosnia, this area was referred to as "Republika Srpska."

· Croatia fought against Serb military and paramilitary forces on its
territory, and supported the creation of a "Greater Croatia" that would
include part of Bosnia's territory. During the war in Bosnia, Bosnian Croat
leaders−with support from Croatia−fought for and declared the
establishment of an ethnically pure state separate from Bosnia known as
"Herceg-Bosna."

· The Bosniaks--who in 1991 were the largest ethnic group in Bosnia with
about 44 percent of the population−fought for a unified, multiethnic
Bosnia, but with Bosniaks in control.

The second set of conflicts consisted of (1) the war in Kosovo between
Yugoslav security forces13 and Kosovar Albanian insurgents and (2) the North
Atlantic Treaty Organization (NATO) bombing campaign against Yugoslavia.
During and after the conflicts, Kosovar Albanian insurgents and Yugoslav
security forces had mutually exclusive goals. The insurgents fought for the
independence of Kosovo. On the other hand, Yugoslav forces, most of whom are
Serb, fought to retain Yugoslavia's sovereignty over the province, an area
referred to as a cradle of Serbian culture and national heritage. The NATO
bombing campaign against Yugoslavia is discussed in Briefing Section IV.

The wars in Croatia, Bosnia, and Kosovo resulted in the displacement of an
estimated 2.4 million refugees and 2 million internally displaced persons.14
The largest population flows were associated with the war in Bosnia, during
which an estimated 2.3 million people became displaced. During the war, most
of the 1 million people who became displaced within Bosnia had moved to
areas controlled by their own ethnic group; as a result, most areas of the
country, with the exception of central Bosnia, were populated and controlled
by a predominant ethnic group at the end of the war (see app. II). By the
end of the war in Croatia, an estimated 300,000 Croatian Serbs had become
refugees. During the Kosovo conflict, an estimated 1.5 million Kosovars,
primarily Albanians, either fled or were forced out of their homes by
Yugoslav security forces; about 800,000 of them left Yugoslavia. About
60,000 people, largely Serbs, fled the province before the start of NATO
airstrikes against Yugoslavia. An estimated 200,000 Serbs lived in Kosovo at
that time.

Legend
KFOR = Kosovo Force/International Security Force

The international community used various agreements to end the conflicts in
Bosnia and Kosovo and establish conditions for deploying two large, complex
peace operations.

The Bosnia peace operation was established by the Dayton Agreement15 in
mid-December 1995. This operation now consists of the NATO-led Stabilization
Force (SFOR), which has the authority to use force to enforce compliance
with the military aspects of the agreement, and four principal international
civilian organizations. The lead civilian organization, the Office of the
High Representative, was created by the agreement and given many
responsibilities, including making the final interpretation in Bosnia of the
agreement's civil provisions. In December 1997, the international community
supported the decision of the High Representative to more actively exercise
his Dayton authority to include imposing temporary solutions when Bosnia's
political leaders were stalemated. The Dayton Agreement defined Bosnia as
consisting of two entities that had been created during the war--Republika
Srpska and the Bosniak-Croat Federation16--and divided them by the
"interentity boundary line." (See app. II for a map of Bosnia and an
organization chart of the Bosnia Peace operation.)

The overall political framework for Kosovo−as articulated in U.N.
Security Council Resolution 1244 of June 10, 1999−called for, among
other things, (1) the deployment of the Kosovo Force/International Security
Force (KFOR) as an international security presence led by NATO, which has
the authority to use force to enforce military agreements with the former
warring parties and to ensure public safety and order; and (2) the
establishment of a civilian U.N. interim administration mission to serve as
the interim government for Kosovo. The U.N. mission is responsible for
leading economic and social reconstruction, conducting elections, monitoring
human rights, ensuring the protection and right to return of all refugees
and displaced persons, and eventually facilitating the process to decide
Kosovo's future status. The U.N. Security Council resolution did not exclude
or call for the possibility of Kosovo's independence in the future. The
resolution called for substantial autonomy for the people of Kosovo while
retaining Yugoslavia's sovereignty over the province, even after the
withdrawal of all Yugoslav security forces.

The specific military commitments of the former warring parties in Kosovo
are contained in three separate agreements. The June 9, 1999, military
technical agreement between NATO and the governments of Yugoslavia and the
republic of Serbia required the phased withdrawal of Yugoslav security
forces from Kosovo within 12 days. According to U.N. Security Council
Resolution 1244, after the withdrawal, an agreed number of Yugoslav and
Serbian personnel (hundreds, not thousands) would be permitted to return to
Kosovo for selected functions. As of April 3, 2000, no date had been
specified for the return of these personnel. The military technical
agreement also created a "ground safety zone", a 5 kilometer wide zone
extending beyond the Kosovo boundary with the rest of Yugoslavia. No
Yugoslav security forces --military or police-- are allowed to enter or
remain in the ground safety zone.

The June 20, 1999, agreement between NATO and the Kosovo Liberation Army
called for the army's demilitarization.17 Under the September 20, 1999,
regulation of the U.N. mission and the accompanying statement of principles
from the KFOR commander, the Kosovo Liberation Army was to transform into a
civilian organization known as the "Kosovo Protection Corps"--an
organization intended to be a multiethnic, emergency service agency of 5,000
civilian personnel (3,000 active and 2,000 reserve)--as well as into the
Kosovo Police Service. The statement of principles allowed for a significant
portion of the corps to be drawn from the leadership and ranks of the Kosovo
Liberation Army. In addition, members of the army were given preference in
the recruitment of the Kosovo Police Service.

The Kosovo Liberation Army officially ceased to exist on September 20, 1999,
when KFOR certified it as "demilitarized." In September 1999, the
provisional Kosovo Protection Corps consisted of 9,200 personnel, primarily
former Kosovo Liberation Army members. The corps was formally established in
January 2000. (See app. III for a map of Kosovo and organization charts of
the Kosovo peace operation.) KFOR and the U.N. mission in Kosovo currently
share responsibility for transitioning the Kosovo Liberation Army into the
Kosovo Protection Corps.

Current Situation in Kosovo and Bosnia

Note : All personnel numbers are as of January 2000. The main elements of
KFOR and SFOR are located in Kosovo and Bosnia, respectively; all other
troops are support troops. The KFOR Macedonia figure includes 163 personnel
in Greece. SFOR figures exclude another 350 U.S. troops in Hungary who are
directly supporting SFOR.

Sources: GAO analysis of personnel data from KFOR and SFOR headquarters.

The large presence of NATO-led military personnel in the region--about
70,000 troops located in five countries--has greatly reduced the ability of
the former warring parties in Kosovo and Bosnia to restart the conflicts in
those locations. However, the former warring parties largely retain their
wartime goals, and, according to western observers, would resume war if the
NATO-led troops were withdrawn.

The NATO-led force in Kosovo continues to deter a resumption of hostilities
there by (1) ensuring that uniformed Yugoslav security forces, who withdrew
from Kosovo as scheduled, remain outside of the province; and (2) monitoring
the demilitarization and transformation of the Kosovo Liberation Army into
the civilian Kosovo Protection Corps. Although the NATO-led force considers
the former Kosovo Liberation Army to be in compliance with its
demilitarization agreement, KFOR and U.N. international police said that
they have detained members of the provisional protection corps for carrying
unauthorized weapons and engaging in violence and intimidation against
ethnic minorities. Moreover, a large number of undeclared weapons remain
hidden. Further, according to western observers and their reports, the
Kosovo Protection Corps−which is considered by its leadership to be
the core of Kosovo's future army−has retained the army's overall
structure and remained capable of resuming hostilities on short notice. In
addition, armed Kosovar Albanian insurgent groups outside of the control of
the former Kosovo Liberation Army continued to operate in the province, as
did Serb paramilitaries, specifically, locally organized groups of armed
Serbs.

The NATO-led force in Bosnia, SFOR, has continued to enforce the cease-fire
and ensure the separation and progressive reduction of the Bosniak, Bosnian
Croat, and Bosnian Serb militaries, but paramilitaries--specifically, small
groups of armed thugs organized and controlled by extremist political
leaders−continued to operate in the country. SFOR also continued to
provide a military presence in critical areas or "hot spots" where the
international community expects violent resistance to Dayton implementation,
for example, in locations where people are attempting to return to their
prewar homes across ethnic lines.

Parties to the wars in Kosovo and Bosnia, largely supported by their
respective ethnic groups, still retain their wartime goals. According to
fall 1999 polls from the U.S. Information Agency, almost all Kosovar
Albanians are willing to fight for the independence of Kosovo, while about
half of Serbs in Serbia are willing to fight to retain Kosovo as part of
Yugoslavia. Further, the vast majority of Bosnian Serbs and Bosnian Croats
continued to want states separate from Bosnia, while almost all Bosniaks
support a unified, multiethnic Bosnia, but, according to some observers,
with Bosniaks in control.

Since the end of the NATO bombing campaign, according to reports of the
Organization for Security and Cooperation in Europe and others, the overall
level of violence in Kosovo has declined significantly, but retaliatory,
ethnically related violent incidents still regularly occur and recently
increased with the approach of spring. In many incidents, Kosovar Albanians
harass or violently intimidate ethnic minority populations, such as Serbs
and Roma (Gypsy), frequently forcing them to leave their homes for
Serb-controlled areas of Kosovo or locations outside the province. In other
cases, Serb paramilitaries or armed groups have harassed and intimidated
Kosovar Albanians. In late February 2000, the U.N. international police
reported increasing violence against Serbs in the province.

During early 2000, the city of Kosovska Mitrovica emerged as the most
difficult "hot spot" in Kosovo after a series of escalating violent
incidents among Kosovar Serbs and Albanians occurred there.18 According to
U.N. and other reports, the incidents included (1) Albanians striking with
an antitank rocket a U.N. bus transporting Kosovar Serbs, killing two
elderly people on board; (2) a crowd of Serbs going on a retaliatory rampage
in the predominately Serb northern side of Mitrovica, leading to the deaths
of 8 ethnic Albanians and the exodus of another 1,650 from the northern part
of the city; (3) both ethnic groups attacking KFOR personnel and U.N.
property; and (4) violence associated with Kosovar Albanians returning home
to northern Mitrovica. In public statements, U.S. and international
officials blamed extremists from both ethnic groups for causing the
incidents, while a U.S. government official also blamed Yugoslavia's
leadership for using Yugoslav security forces to foment the security
problems.

The continuing hostilities and lack of political and social reconciliation
between Kosovar Albanians and non-Albanians have overshadowed positive
developments that have occurred in Kosovo since the end of the NATO bombing
campaign. For example, the U.N. mission has established a number of interim
administrative structures for governing the province, including the
provisional judicial panel and the provincewide Kosovo Transition Council
formed by the U.N. mission in July 1999; however, Kosovar Serbs either have
never joined or have withdrawn from them. Further, while at least 800,000
Kosovar Albanian refugees who had fled Kosovo during the conflict had
returned there by December 1999, about 243,000 non-Albanians had left the
province for other parts of Serbia and Montenegro by November 199919 and, as
of February 2000, an estimated 10,000 to 15,000 Serbs were displaced from
their homes within Kosovo as they had moved to Serb majority areas.

While SFOR has ensured an absence of war in Bosnia, political leaders of the
country's three major ethnic groups continued to obstruct the implementation
of the Dayton Agreement's political, humanitarian, and economic provisions.
For example, institutions of the national government and the joint
Bosniak-Croat Federation still largely do not function due to lack of
cooperation among the parties. In addition, the Republika Srpska government
has been unstable since early March 1999, when the High Representative
removed from office the entity's democratically elected President, a
hard-line Serb nationalist, for his deliberate attempts to obstruct the
implementation of the Dayton Agreement. Moreover, the economy remains
stagnant, largely because Bosnia's political leaders continue to resist
implementing meaningful economic reforms.

Further, people attempting to return home to areas controlled by another
ethnic group continue to face sporadic attacks and violent intimidation in
some locations, as well as political and legal obstruction. According to the
SFOR Commander, in late 1999 and early 2000 the NATO-led force increased the
number of "hot spots" its troops patrol, as well as the number of patrols in
some areas, in response to violent incidents related to these returns.
Recent polling data20 show that of those refugees and displaced persons who
did not wish to return to their prewar homes, 58 percent said that the lack
of security for themselves and their property is the primary reason they
will not return. In contrast, many international officials in Bosnia,
including the SFOR Commander, believe that the primary obstacle to minority
returns is the poor economy, primarily unemployment and a lack of funding to
repair homes, rather than a lack of personal security.

The number of "minority returns" in Bosnia−that is, people returning
to their prewar homes across ethnic lines−continues to increase each
year, though the number in 1999 was significantly lower than the 120,000
minority returns hoped for by the international community. About 9,500
minority returns occurred in 1996; 39,000 in 1997; 41,275 in 1998; and
42,500 in 1999 for a total of about 132,275 minority returns since the
signing

of the Dayton Agreement.21 According to the 1999 State Department Human
Rights report and a senior SFOR officer, political leaders of all three
ethnic groups have continued their attempts to take or maintain control of
strategically important terrain through the return process. They may either
organize or discourage the return of people from their own ethnic group to
areas across ethnic lines or obstruct the return of people from other ethnic
groups to their areas of control.

In an attempt to accelerate progress, the High Representative during 1999
and early 2000 continued to use his authority to revoke or amend existing
laws, to impose new laws, and to remove government officials from office.
For example, he imposed (1) a law that established a state border service22
after Bosnian Serb delegates to Bosnia's parliament refused to pass the law
and (2) laws that instituted a judicial framework to combat crime and
corruption in the Federation. Moreover, to help promote minority returns, in
late November 1999 he removed 22 local officials from their positions for
fostering "the poison of division" and obstructing Dayton implementation.

As originally envisioned by NATO planners, KFOR would conduct public
security functions in Kosovo for a period of at least 3 months. After that,
the U.N. international civilian police force would assume full
responsibility for policing until the establishment of a local police
service in Kosovo by the end of 2002. In November 1999, U.N. and KFOR
officials were unable to specify a date by which the U.N. international
police force would assume

primary responsibility for public security in Kosovo.23 According to a
senior KFOR officer, even after the public security function transitions to
the United Nations, KFOR could reduce its presence by no more than one
military police battalion of about 650 troops from each of the five military
sectors, given the security situation and the force's other missions.

KFOR is still performing most of the tasks that were to have been
transferred to the U.N. international police force by September 1999,
largely because of delays in fully staffing the U.N. international police
force, according to KFOR and U.N. officials. As of April 7, 2000, according
to U.N. documents, the U.N. international police force was significantly
understaffed at 2,886 personnel, about 1,830 fewer that the number
authorized by the United Nations and almost 3,115 less than requested by the
U.N. mission in Kosovo. Of these amounts, about 1,100 positions were for
specialized police, that is, police trained in riot control duties. Because
of these shortfalls, the U.N. police force had assumed primary
responsibility for public security in only 4 of Kosovo's 29 municipalities
as of January 2000.

The NATO-led forces in Kosovo and Bosnia both face a shortfall in their
respective specialized police units, also known as "multinational
specialized units." These units are intended to be specially trained and
equipped military units24 that would assist regular soldiers in dealing with
civil disturbances associated with events such as returns of refugees and
displaced persons and installation of elected officials. SFOR's
multinational specialized unit has been significantly understaffed since its
establishment in late August 1998, operating with only 1 of 2 required
battalions, or 450 of the required 750 personnel. Similarly, KFOR's
multinational specialized unit is only partially staffed. According to a
U.N. official, KFOR is in effect competing with the U.N. international
police force for these specialized police assets, as the NATO-led force's
multinational specialized unit consists of the same types of police
personnel being sought by the United Nations.

In mid-July 1999, about the time most of KFOR was deploying into Kosovo,
senior NATO officials told us that many allies were considering reducing
their troop contributions to SFOR, largely because they could not provide
resources for two concurrent military operations in the Balkans. Based on a
study by NATO's military headquarters, the North Atlantic
Council−NATO's political leadership−concluded in October 1999
that a significantly reduced SFOR could maintain a secure environment in
Bosnia, assuming that the force would be restructured to allow a more
flexible response to outbreaks of violence and would focus only on the
force's key military tasks associated with controlling the Bosniak, Bosnian
Croat, and Bosnian Serb militaries. About the same time, NATO revised KFOR's
operations plan and force structure and authorized a reduction in its force
levels, based on its assessment that improving security conditions in the
province and the start-up of the U.N. mission in Kosovo allowed a
modification to the force's mission and tasks.

The SFOR drawdown−from about 32,000 troops (as of September 1999) to
about 20,000 troops (as of April 2000)25−will substantially reduce the
amount of assistance the force provides to civilian efforts, including
general security for the operations of international organizations, area
security for returns of people across ethnic lines, and support for the
conduct of elections. After SFOR announced its drawdown and the U.N. mission
in Bosnia decided on a more robust implementation strategy, the U.N. mission
developed a request for U.N. authorization of an armed protection group; as
of April 7, 2000, this request had not yet been approved by U.N.
headquarters.26 The proposed group would consist of about 270 armed police
and would provide protection for U.N. police monitors27 and other U.N.
personnel. According to U.N. officials, with protection from the armed
protection group, U.N. staff would be able to credibly and safely pursue
more robust actions to remove political/criminal obstructionists and
complete earlier its mission of local police reform and restructuring.

NATO is currently reviewing the KFOR statement of requirements, which could
increase the force size or change the force composition, in response to
changing conditions in and around Kosovo. After initially deploying a force
of about 43,000 NATO nation troops to Kosovo,28 NATO nations contributing to
KFOR reduced their troop strengths to 33,000 during the November 1999 troop
rotation. However, after a rapid escalation of violent incidents occurred in
Kosovska Mitrovica during February 2000, the Supreme Allied Commander,
Europe, asked for two additional battalions for Kosovo. As of March 17,
2000, two NATO countries had agreed to provide the equivalent of one
additional battalion for this purpose, and, according to DOD officials, the
United States had agreed to deploy an additional 125 military personnel to
the U.S. sector. According to executive branch officials, it may ultimately
be necessary for NATO to consider reviewing the KFOR operations plan to (1)
better meet the staffing demands of the force's existing public security
mission and (2) control Kosovo's provincial boundary to prevent armed
Albanian groups from operating in southern Serbia from bases in Kosovo. (See
Briefing Section III for more discussion of the security situation in
southern Serbia.)

The two NATO-led forces also operate within geographic and operational
constraints placed on participating forces by their respective national
command authorities. Participating countries allow their forces to
participate in SFOR and KFOR within specific areas and with specific rules
of engagement.29 These restrictions at times could prevent the commanders of
the NATO-led forces from deploying their troops outside of specific
geographic areas or using them for certain tasks within assigned areas,
thereby reducing the forces' ability to respond quickly and effectively.

U.N. efforts to establish a functioning civil administration and create a
democratic, multiethnic society in Kosovo are hindered in part by a lack of
civilian resources.30 For example, the U.N. mission was tasked with creating
municipal administrative structures based on democratic principles. However,
according to U.N. officials in Kosovo, the U.N. mission was slower to deploy
international administrators to the field than had been hoped, due largely
to a lack of available personnel at the start of the endeavor. These
officials told us that the slow deployment of U.N. staff allowed the Kosovo
Liberation Army to gain control of municipal administrations in an
undemocratic manner and made it difficult for U.N. administrators to
effectively control them. Moreover, the United Nations was unable to do
advance planning for the mission's operations, including staff deployment,
because it was informed that it would be leading the mission only a short
time before its start.31

Projected Security Situation in the Balkans

Note: Croatia's former ruling nationalist party pursued policies that helped
create these current conditions. The country's newly elected government has
pledged to change many of these policies, as discussed later in this
section.

Sources: GAO analysis of documents from and interviews with officials from
the State Department, including the U.S. Information Agency; NATO, including
SFOR and KFOR; the Organization for Security and Cooperation in Europe; the
United Nations, including the U.N. High Commissioner for Refugees; western
observers; and nongovernmental organizations.

Throughout the Balkans, many of the region's major ethnic groups continue to
dispute the definitions of what geographic territory and ethnic groups
constitute their states. As discussed earlier, parties to the wars in Bosnia
and Kosovo, largely supported by their respective ethnic groups, still
retain their wartime goals. Croatia's former ruling nationalist party, which
in early 2000 was defeated in parliamentary and presidential elections by
democratic opposition groups, (1) politically, economically, and militarily
supported Bosnian Croat aims to maintain a state separate from Bosnia; and
(2) denied citizenship rights to and obstructed the return of Croatian Serb
refugees. Over the past 2 years in Montenegro, as Slobodan Milosevic was
consolidating Yugoslavia's federal power at the expense of the
republic-level governments, segments of the population of Montenegro have
begun calling for independence from Yugoslavia. In Albania, the U.S.
Secretary of State told the Albanian parliament during mid-February 2000
that "the international community would no sooner accept a Greater Albania
than it would a Greater Serbia or Croatia." According to some western
observers, people in the region, especially in Macedonia, fear that
Albanians in the region do support a "Greater Albania."32 In Macedonia,
where political and social tensions have increased between the country's two
largest ethnic groups, Macedonians and Albanians, neither group appears
fully committed to developing a unified, multiethnic state.

Milosevic retains authoritarian power over both Yugoslav and republic of
Serbia governmental structures--including their security forces--and uses
their combined power to further his political goals in Kosovo, Montenegro,
and other areas in the region, as described later in this section.

Economies in the region, many of which were poor before the wars, suffer
from years of wars, sanctions against Yugoslavia, and limited progress on
making market reforms.33 The destruction of infrastructure during the wars
in Bosnia, Croatia, and Yugoslavia, as well as the months of civil unrest in
Albania, led to economic turmoil in each of these locations and put stress
on neighboring economies that depended on these locations as trade routes
and markets. U.S., European Union, and U.N. sanctions against Yugoslavia and
Serbia's economic war against its neighbors have caused economic decline in
Serbia and trade losses for the rest of the region, since Serbia represents
a large market for many of the region's countries. Balkan countries
generally have been unable to implement the free market reforms necessary to
attract foreign investment, due to constant political instability or a lack
of political will on the part of their leaders, according to international
officials and observer reports.

As shown in figure 1, approximately 2.4 million refugees and displaced
persons from the conflicts in Bosnia, Croatia, and Kosovo have not returned
to their prewar homes or found durable solutions to their displacement.34 As
of November 1999, about 97 percent of these people were residing within the
Balkans region, either as refugees (624,630 people) or displaced persons
within their own country (1.74 million people). The remaining 79,200 people
were refugees located in countries outside of the Balkans region. According
to observer reports and U.S. Information Agency polling data, the reasons
for their continued displacement include the intransigence of political
leaders, the lack of security for returnees, the unavailability of housing,
and poor economic prospects.

Figure 1: Estimate of Refugees and Displaced Persons Still Seeking Solutions
in the Balkans, November 1999

Source: U.N. High Commissioner for Refugees.

This slide summarizes the key unresolved issues by location. For Bosnia and
Kosovo, these issues, as well as the international community's attempts to
resolve them, were discussed in Briefing Section II. The following four
slides discuss in more detail the key security issues in Croatia, Serbia,
Montenegro, and Macedonia.

The international community has attempted to resolve political, social, and
other problems throughout the region through a variety of programs intended
to develop democratic institutions and practices; reform and regenerate
economic systems; and provide humanitarian assistance for refugees,
displaced persons, and others in need. In late July 1999, the international
community formally established a regional assistance framework called the
"Stability Pact for South Eastern Europe." The Stability Pact is intended to
coordinate and prioritize economic and other assistance going to the region,
including Romania and Bulgaria, and to accelerate and deepen the integration
of a reformed region into the Euro-Atlantic community. (See app. IV for more
information on the major U.S. and international military and civilian
programs in locations other than Bosnia and Kosovo and app. V for
information on the Stability Pact initiative.)

Prior to its defeat in elections in early 2000, Croatia's nationalist ruling
party destabilized the region by, among other things, providing economic,
political, and military support to Bosnian Croat attempts to maintain a
separate state and obstructing the return of Croatian Serb refugees.35 The
leaders of Croatia's new government have publicly pledged to change many of
the earlier policies. Specifically, the new President pledged that Croatia
would allow the return of all Croatian citizens to the country, regardless
of ethnicity; recognize that Croats form an element of Bosnia, make
transparent its support for Bosnian Croats; and cut off funds for the
military of their "quasi-state." In public statements, U.S. and
international leaders welcomed the change in government as a positive step
in establishing a democratic system and economic reforms in Croatia and in
improving the country's relations with neighboring countries, as well as
with the rest of Europe. Further, according to international officials in
Bosnia, the elections signify to Bosnian Croats, whose political leaders
belong to Croatia's former ruling nationalist party, that they must give up
their hope of becoming part of Croatia.

In late February and early March 2000, Croatia's new government took steps
toward changing government policies on Croatian Serb refugee returns and
making transparent funding for Bosnian Croat institutions. For example, the
new government announced a program for the return of 16,500 refugees to
Croatia and reached an agreement with the Republika Srpska Prime Minister
for the two-way return of Bosnian Croat and Croatian Serb refugees to their
prewar homes. Further, under U.S. auspices, Croatia's Defense Minister
reached an agreement with the Federation Defense Minister (a Bosnian Croat)
that provides for Croatia's continued financing of the Bosnian Croat army
through the Standing Committee for Military Matters, an institution
established by the Dayton Agreement to coordinate the activities of the
three militaries in Bosnia.

Despite these moves, however, it is not clear (1) to what extent Croatia's
new government will be able to implement these changes; (2) whether all of
Croatia's political leaders have given up the dream of a "Greater Croatia";
or (3) how Bosnian Croats would react to significant changes, if any, in
their relationship to Croatia. For example, Croatia's refugee return program
and two-way return agreement with Republika Sprska may be obstructed by
property laws that continue to favor Bosnian Croat refugees over Croatian
Serbs36 and a lack of progress in returning Bosnian Croats to

their homes in Bosnia. Further, if Croatia does threaten to cut all ties
with Bosnian Croats, a significant number of them may react by choosing to
revoke their Bosnian citizenship, retain their Croatian citizenship, and
move to Croatia, instead of opting to effectively join Bosnia's institutions
and become part of Bosnia.37 About 77 percent of Bosnian Croats want to join
Croatia or become an independent state rather than remain part of Bosnia,
according to late 1999 polling data from the U.S. Information Agency.

According to senior U.S. and NATO officials, Slobodan Milosevic is the
single most destabilizing influence in the Balkans. These officials believe
that Serbia cannot democratize or integrate with the rest of Europe until
Milosevic is removed from power. Further, according to a U.S. official, the
people of Kosovo will not settle for anything short of independence,
including autonomy, while Milosevic retains his power in Yugoslavia. Many
western officials believe that whoever replaces Milosevic would be easier to
negotiate with, less inclined to engage in armed conflict, and less likely
to destabilize the region.

It is unclear whether international efforts to replace Milosevic with the
Serb opposition would succeed, as the opposition remains disunited.
According to DOD officials, it is not a forgone conclusion that the
opposition will replace Milosevic, as current members of Milosevic's regime
may stay in power in his absence. Western observers have noted from recent
polling data that Serb opposition parties could defeat Milosevic in a
democratic election, if they are able to unite on a single platform. The
opposition parties, however, remain unable to unite and capitalize on
popular dissent after the NATO bombing campaign, thus far only unifying in a
call for early elections. According to statements by the U.S. Secretary of
State, the election of democratic opposition parties in Croatia will help
this situation by showing Serb opposition parties that they can win if
united.

Further, if the efforts to remove Milosevic from power and replace him with
the Serbian opposition were to succeed, it is unclear to what extent the
change would improve regional security. While a senior U.S. official stated
that Milosevic's removal would result in Kosovar Albanians agreeing to
remain in Yugoslavia, political leaders and people in the region told us
that a change in Yugoslavia's leadership from Milosevic to the opposition
would have no impact on the security or political situation in Kosovo. They
and western observers in Kosovo explained that Serb opposition leaders
strongly support continued Yugoslav sovereignty over Kosovo and would not
agree to Kosovo's independence, the primary political demand of Kosovar
Albanians during and after the war. Further, according to recent public
statements, Serb opposition leaders have close links to Bosnian Serb
political leaders who, while many of them are anti-Milosevic, are
nationalists who retain the goal of maintaining "Serb unity" and a Serbian
state separate from Bosnia.

In Serbia, low-level violence has occurred regularly since late 1999 in the
form of attacks against the republic's police in southern Serbia−a
predominately ethnic Albanian area outside of Kosovo but near Kosovo's
boundary−by ethnic Albanian insurgents who believe Kosovo's territory
includes this area. In early March 2000, a U.N. official reported that
5,000-6,000 ethnic Albanians had fled southern Serbia since June 1999. Many
of

these people had reported an increase in Yugoslav forces in that area,
stating that the security situation for ethnic Albanians there had
deteriorated to such an extent that life had become intolerable. The U.N.
official added that his agency is concerned that if the conflict between the
ethnic Albanian extremist groups and Serbia's police is allowed to continue,
there may be larger refugee flows from southern Serbia.38

Current low-level violence in Kosovo and Bosnia is likely to continue and
may escalate given the slow pace of political and social reconciliation in
both locations. As long as KFOR maintains a credible deterrent presence, the
likelihood of renewed armed conflict is low; however, low-level violence
will likely continue and may escalate due to the unresolved political status
of Kosovo, competition for power among ethnic Albanian political parties,
and an absence of reconciliation among the province's ethnic groups.
Further, the previously discussed violence in southern Serbia may also
destabilize the security situation in Kosovo. The Commander of KFOR stated
on March 10, 2000, that the situation in southeastern Serbia constitutes a
threat to the peace and security of Kosovo and could develop into a regional
security issue. He also stated that KFOR is prepared to take all action
necessary to ensure Kosovo is not used as a staging base by either ethnic
Albanians or Serbs wishing to "export violence" into southeastern Serbia.

According to U.S. and NATO officials, as long as SFOR remains, the force
will continue to prevent an outbreak of war among the three militaries in
Bosnia. However, as SFOR draws down, there will still be a requirement to
maintain a presence significant enough to deter violence associated with
people returning home across ethnic lines or against international civilian
organizations operating in Bosnia. These types of violent incidents,
according to a U.N. official, will likely increase as more people return to
areas with few or no minority returns and as the international community
attempts to implement other civil aspects of the Dayton Agreement. DOD
officials told us that SFOR, as part of its transition strategy, will look
more to the local police forces in Bosnia to provide security for these
situations. According to the 1999 State Department Human Rights report,
local police in Bosnia−which are still largely organized along ethnic
lines−continue to use excessive force, or do not ensure security, to
discourage minority resettlement in majority areas.

The security situation in Montenegro has become more volatile over the past
year due to the controversy within the republic over its discreet moves
toward greater autonomy or independence and the Yugoslav leadership's
aggressive action against the republic. The ruling coalition government of
Montenegro−which consists of people who support either greater
autonomy or independence−controls the republic's 20,000-strong police
force. The anti-independence movement is led by the former President of
Montenegro (now the Prime Minister of Yugoslavia) and is supported by
Milosevic, who controls the 14,000 Yugoslav army troops and 1,000
federal-level police in Montenegro and has used them and other federal
institutions to intimidate the republic's coalition government. According to
late 1999 polling data from the U.S. Information Agency, about 30 percent of
Montenegro's population support independence, 36 percent greater autonomy
for the republic within Yugoslavia, and 27 percent the status quo.

The likelihood and extent of armed conflict in Montenegro depend on a number
of complex factors, such as how far the President of Montenegro is willing
to push Milosevic to gain greater autonomy, whether Milosevic would
intervene in Montenegro short of a referendum on independence, and whether
the current governing coalition of Montenegro would stay together if a
referendum on independence is not held this spring. Western observers in
Montenegro hold differing views on whether developments in Montenegro would
lead to armed conflict. Some believe that the past close relationship
between the President of Montenegro and Milosevic would encourage them to
reach an understanding before violence occurs, while others believe that the
moves toward greater autonomy or independence will lead to possibly armed
conflict.

While ethnic Macedonians and Albanians are currently working together in the
ruling government coalition, several western observers told us that
interethnic tensions between these two groups could ultimately result in
armed conflict. Structures are in place on both sides that could serve as
the basis for future ethnically based militaries. Specifically, Macedonia's
military and internal security forces are predominantly ethnic Macedonian,
and armed, radical Albanian groups are operating in Macedonia.

These observers offered a range of views about how soon and under what
scenario armed conflict may occur in Macedonia. Armed conflict could develop
(1) if ethnic Albanian parties pulled out of the coalition government due to
a lack of progress in resolving political issues; according to a western
observer, it would most likely occur sometime over the next year; or (2) if
radical Albanian groups began to violently target Macedonian institutions,
leading Macedonia's police to crack down on ethnic Albanians. A western
observer in Macedonia is most concerned with this second threat in the near
term, stating that these radical groups have been emboldened by what the
Kosovo Liberation Army was able to accomplish. Either of these scenarios
could lead to a spiral of violent incidents and ultimately armed conflict
among the country's two major ethnic groups, similar to the violence that
occurred in Kosovo. Other observers told us that ethnic tensions in
Macedonia could result in violence between the two communities in 10 to 20
years.

Factors That Led to the Withdrawal of Yugoslav Security Forces From Kosovo

· February 1998: Large-scale conflict began in Kosovo, largely characterized
by ethnic Albanian attacks against Yugoslav security forces followed by
excessive, indiscriminate, and disproportionate military responses of those
forces against ethnic Albanian insurgents and the civilian population.

· October 1998: Under threat of NATO airstrikes, Milosevic agreed to allow
unarmed international monitors and a NATO air verification mission to verify
Yugoslav compliance with cease-fire and force reduction agreements. About
this time, the Kosovo Liberation Army agreed to exercise self-restraint. In
late 1998 and early 1999, there was a continuous deterioration of the
security situation as both sides violated their agreements.

· January 15, 1999: The retaliatory massacre of 45 Kosovar Albanians by
Yugoslav security forces at Racak led the international community to renew
efforts to negotiate an end to the conflict. This occurred 1 week after the
Kosovo Liberation Army ambushed a Yugoslav police patrol and reportedly
killed three officers, an act called a terrorist attack and serious breach
of the cease-fire by international monitors.

· February 1999: NATO and the United States agreed to deploy troops to
Kosovo in a "permissive environment"--one where all parties to the conflict
agree to the presence and mission of NATO-led forces. The first round of
peace talks in France ended with neither party signing the proposed interim
agreement.

· March 19-23, 1999: Peace talks broke down after Kosovar Albanian leaders
signed the proposed agreement but Yugoslav officials did not. After the
international monitors withdrew from Kosovo, Yugoslav forces began a massive
offensive. U.S. negotiators failed in their attempts to secure a last-minute
settlement with Milosevic.

· March 24, 1999: In announcing the NATO airstrikes, the President said he
did not intend to put U.S. troops in Kosovo to fight a war.

· April-May 1999: NATO escalated the bombing to include strategic targets
throughout Yugoslavia. NATO deployed ground troops to Macedonia and Albania
for humanitarian and possible war fighting missions.

· May 6, 1999: The West and Russia agreed to a basic strategy and terms for
a possible peace settlement.

· May 18, 1999: In responding to a question about the possible use of ground
troops to end the Kosovo conflict, the U.S. President stated that no
military option had been ruled out.

· May 25, 1999: NATO endorsed an operational plan for a NATO-led peace
enforcement mission in Kosovo and later approved a force level of about
50,000 troops for the mission.

· May 27, 1999: Milosevic and four senior officials from the governments of
Yugoslavia and Serbia were indicted for war crimes in Kosovo by the
international war crimes tribunal.

· June 2, 1999: The President committed 7,000 U.S. troops to the proposed
NATO-led mission, reiterating that no military option had been ruled out.

· June 3, 1999: Milosevic agreed to a settlement brought by Russian and
European Union envoys. NATO suspended the air campaign on June 10 after some
Yugoslav withdrawals, and officially ended it 10 days later.

Senior U.S., U.N., and NATO officials, as well as a senior Yugoslav civilian
official in Kosovo, offered a number of views on the decisive factors in
Milosevic's decision to withdraw Yugoslav security forces from the province.
According to the senior Yugoslav official, the fear of a NATO ground
invasion, combined with the timely offer from Russia's envoy, was the
primary factor in the withdrawal of Yugoslav forces from the province.
According to this official, the Yugoslav leadership believed that NATO would
invade Kosovo if the air campaign alone could not defeat Yugoslav forces and
feared that an invasion would result in Yugoslavia losing Kosovo completely.
This official said that the Yugoslav leadership saw the offer of Russia's
envoy as the best possible option, deciding that it was better to withdraw
than be conquered, if NATO honored the proposed agreement.

Senior U.S., U.N., and NATO officials also noted the significance of
Milosevic's fear of a ground invasion and the positive role played by
Russia's diplomatic efforts, particularly because of their impact in
convincing Milosevic that Russia no longer supported his war. These
officials also cited the following factors as key to the decision to
withdraw Yugoslav security forces from Kosovo.

· The impact of NATO's air campaign. According to U.S. and NATO officials,
NATO's air campaign against strategic, military-industrial, and national
command-and-control targets in Yugoslavia was a significant factor in the
withdrawal of Yugoslav security forces from Kosovo. Some of these officials
said that this air campaign had an economic impact on Yugoslavia's
leadership because it hurt the ability of Milosevic and his associates to
make money.

· NATO's continued cohesion and ability to take the military action
necessary. Senior NATO and U.S. officials stated that Milosevic thought that
the alliance would fall apart after collateral damage began to occur, and he
was no longer willing to sustain the bombing once he felt NATO would remain
cohesive. Also, NATO and U.S. officials believed that Milosevic was affected
by the fact that NATO leaders showed resolve to use all force necessary to
prevail.

· The indictment of Milosevic. NATO and U.S. officials also told us that
this indictment was to a lesser extent a factor in Milosevic's decision to
withdraw his forces.

· Loss of support for the war within Serbia. A U.N. official stated that he
believed Milosevic withdrew his forces because he had lost support from his
inner circle. Similarly, U.S. officials noted that unrest within Serbia
helped put pressure on Milosevic to end the war.

Selected Issues Related to U.S. and International Operations in the Balkans

The executive branch has described U.S. interests in the Balkans in a number
of ways. The National Security Strategy39−the most authoritative
statement on the President's definition of U.S. interests and military
commitments worldwide--lays out three categories of national interests:
vital, important, and humanitarian. The strategy directly links U.S.
interests in the Balkans to two of these three types of interests, stating
that the decision to use military force is dictated first and foremost by
the definition of U.S. national interests.

· European stability is described in the strategy as a "vital" U.S.
interest. Vital interests are of broad, overriding importance to the
survival, safety, and vitality of the United States, for example, the
physical security of territory belonging to the United States and U.S.
allies. According to the strategy, the United States will do what it must to
defend these interests, using military force decisively and, if necessary,
unilaterally. The U.S. commitment to European security includes U.S.
leadership in NATO and the forward presence of 100,000 military personnel in
Europe.

· NATO operations to end the conflicts and restore peace in Bosnia and
Kosovo are presented as "important" U.S. interests, rather than as vital
interests. According to the strategy, important interests do not affect the
survival of the United States but do affect national well-being and the
character of the world in which Americans live. In cases where important
U.S. interests are at stake, the strategy states that the use of military
forces should be selective and limited.40

The National Security Strategy indicates that United States has a continuing
interest in "peace in the Balkans and Southeastern Europe" 41 but does not
directly link vital or important interests in the region to when, how, or
for how long U.S. military forces would be employed there. The strategy
states that continued instability in the region threatens European security,
an area that it had previously defined as a vital U.S. interest. In
commenting on our report, the Undersecretary of Defense for Policy
reiterated that the National Security Strategy reads, "'The United States
has an abiding interest in peace in this region because continued
instability there threatens European security.' The identified interest here
is clearly instability threatening European security − a vital
interest in and of itself."

The National Security Strategy does not directly link humanitarian interests
to the Balkans region, although executive branch officials on many occasions
have cited humanitarian interests there. The report cites the following as
examples of humanitarian and other interests that may require a U.S.
military response: (1) natural and manmade disasters; (2) promoting human
rights and seeking to halt gross violations of those rights; and (3)
supporting democratization, adherence to the rule of law, and civilian
control of the military. According to the strategy, the military is
generally not the best tool for addressing humanitarian concerns, but under
certain conditions it may be appropriate to use U.S. military forces for
these purposes. The strategy states that such efforts by the United States
will be limited in duration.

According to the National Security Strategy, U.S. military forces should be
used when important interests are at stake only if, among other things, the
costs and risks of their employment are commensurate with the importance of
U.S. interests, and they are likely to accomplish their objectives. In
making a determination on these matters, key issues to consider include (1)
the appropriate level of the U.S. military contribution relative to that of
other NATO countries, (2) whether strategic and operational objectives for
operations in the region have been clearly defined, and (3) whether the
international community is willing and able to provide the necessary
military and civilian resources for the operations.

The following three slides contain information on estimated U.S. costs for
operations in the Balkans from fiscal years 1992 through 2000 and the
relative contributions of the United States and other NATO allies to NATO
air and ground operations in the Balkans.

aIncludes the U.S. Agency for International Development; the U.S.
Information Agency; and the Departments of State, Agriculture, Commerce
Justice, and the Treasury.

bDOD's incremental costs include the costs of operations in Croatia, Bosnia,
Kosovo, and Macedonia.

cIn fiscal years 1996 and 1997, U.S. civilian cost estimates were available
only for Bosnia and Albania. We used 1998 cost data for the remaining
countries--about $100 million−to estimate civilian costs during fiscal
years 1996 and 1997.

According to executive branch data, as of March 29, 2000, the United States
will have provided about $21.2 billion to support efforts to stabilize the
Balkans from fiscal years 1992 through 2000: about $15.7 billion in DOD
incremental costs42 for military-related operations, and about $5.5 billion
for activities of civilian agencies. U.S. costs increased significantly in
1995 and again in 1999, when the United States first deployed military
forces to Bosnia and Kosovo, respectively. By the end of fiscal year 2000,
the United States will have spent an estimated $18.2 billion in these two
locations, or about 86 percent of its total estimated costs. Furthermore,
almost half−about 48 percent−of the estimated U.S. costs in the
Balkans from fiscal year 1992 through 2000 will have been incurred in the
last 2 years of this period. Appendix VI provides more information on U.S.
costs for operations in the Balkans.

Note 1: DOD and NATO define a "sortie" as an operational flight by one
aircraft.

Note 2: DOD and NATO define a "strike" as an attack intended to inflict
damage on, seize, or destroy an objective.

Note 3: "Support sorties" consist of both combat and noncombat missions.
They include intelligence and reconnaissance, combat air patrols to protect
strike missions, combat search and rescue, and aerial refueling.

Source: GAO analysis of DOD data.

At the height of Operation Allied Force, the 79-day NATO air campaign
against Serbia and Montenegro, the air forces of the allied countries had
about 1,058 aircraft deployed for the operation. The United States provided
731 aircraft, or 69 percent of the total. The United States also conducted
over 23,200 of all sorties, or 62 percent of the total, and 5,035 strike
sorties, or 53 percent.

Note: SFOR and KFOR personnel numbers are as of January 2000.

Sources: GAO analysis of SFOR and KFOR data.

As of January 2000, NATO members had contributed about 60,150 troops, or 86
percent of both forces, to the two NATO-led forces in the Balkans. The
remaining 9,850 troops were provided by 21 non-NATO countries, including
4,800 from Russia.

The United States--with about 12,800 troops in the two NATO-led
forces−is the largest force provider to NATO-led operations in the
Balkans. The next largest force provider, Italy, has contributed about 8,100
military personnel to these operations. The U.S. military currently provides
about 15.4 percent and 23.6 percent of all military personnel in KFOR and
SFOR, respectively, or 18 percent of the total military commitment to the
Balkans. Americans hold the key NATO military positions that control the
operation in Bosnia and, to a lesser extent, in Kosovo. While the SFOR
commander is an American general officer, the KFOR commander is a European
general officer.

The U.S. military has instituted and follows the most stringent force
protection measures among NATO allies, according to U.S. and European
military officials, measures that have a significant impact on the number of
troops needed for U.S. operations. For example, in Bosnia, the U.S. military
employs up to 55 percent of its ground combat forces on "presence patrols"
and 40 percent on duties associated with force protection.43 In contrast,
according to a senior U.K. defense official, the United Kingdom generally
devotes 14 percent of its ground combat forces to force protection. This
relatively small force protection requirement allows the United Kingdom to
conduct operations with fewer troops on the ground.

In December 1999, member nations of the European Council of the European
Union agreed that by 2003 they should be able to deploy and sustain a force
of up to 50,000-60,000 troops. As currently envisioned, these forces should
be capable of a full range of military missions and tasks, including the
most demanding, and should also be able to deploy within
60 days and be sustained for at least 1 year. However, there has been no
official link between the development of this European military force and
European agreement to the eventual withdrawal of U.S. military forces from
the Balkans once the European force is established. Over the past
2 years, U.S. and European military and civilian officials have told us that
if the United States were to withdraw its military personnel from Bosnia,
European countries would follow and withdraw their troops.

Distribution of Ethnic Albanians in the Former Yugoslavia

This appendix contains a map showing the distribution of ethnic Albanians in
the former Yugoslavia, as of February 1999 (see fig. 2). We note that the
distribution of ethnic groups in Kosovo has changed significantly since
then. Many areas of the province have become almost all ethnic Albanian due
to the displacement of non-Albanians within and from the province since the
end of the NATO airstrikes. Updated population figures, however, were not
available for this report.

Figure 2: Distribution of Ethnic Albanians in the Former Yugoslavia, as of
February 1999

Source: Central Intelligence Agency.

Bosnia Peace Operation

This appendix provides information on the organization of civilian and
military efforts in the Bosnia peace operation. Figure 3 is a map of Bosnia
detailing (1) ethnic distribution; (2) the "interentity boundary line" that
divides the country's two entities−the Federation and the Republika
Srpksa; (3) the location and division of the three military sectors of the
Stabilization Force (SFOR); and (4) the Brcko district.44 Figure 4 shows the
organization of military and civilian operations in Bosnia. Figure 5 shows
the SFOR organization as of January 2000.

Figure 3: Map of Bosnia

Figure 4: Organization of Military and Civilian Operations in Bosnia
Legend
CIMIC = Civil Military Cooperation
EBRD = European Bank for Reconstruction and Development
IMF = International Monetary Fund
IPTF = International Police Task Force
NAC = North Atlantic Council
OSCE = Organization for Security and Cooperation in Europe
PIC = Peace Implementation Council
SHAPE = Supreme Headquarters Allied Powers Europe
UNMIBH = United Nations Mission in Bosnia and Herzegovina
UNHCR = United Nations High Commissioner for Refugees

Note: Coordination in Bosnia occurs at all levels of among these
organizations.

Figure 5: SFOR Organization
Legend
AIRSOUTH = Allied Air Forces, Southern Europe
COMSFOR = Commander, Stabilization Force
NAVSOUTH = Allied Naval Forces, Southern Europe
SACEUR = Supreme Allied Commander Europe
STRIKEFORSOUTH = Naval Striking and Support Forces, Southern Europe

Note: The Aviation Task Force is a dual function unit that provides SFOR
operational reserve for all of Bosnia and sector support for the U.S.-led
Multinational Division (North).

Kosovo Peace Operation

This appendix provides information on the organization of civilian and
military efforts in the Kosovo peace operation. Figure 6 is a map of Kosovo
detailing the location and division of the five military sectors of the
Kosovo Force/International Security Force (KFOR). Figure 7 shows the
organization of military and civilian operations in Kosovo. Figure 8 shows
the KFOR organization as of January 2000.

Figure 6: KFOR Brigade Sectors in Kosovo

Figure 7: Organization of Military and Civilian Operations in Kosovo
Legend
EU = European Union
NAC = North Atlantic Council
OSCE = Organization for Security and Cooperation in Europe
SHAPE = Supreme Headquarters Allied Powers Europe
UNMIK = United Nations Interim Administration Mission in Kosovo
UNHCR = United Nations High Commissioner for Refugees

Note: Coordination in Kosovo occurs at all levels among these organizations.

Figure 8: KFOR Organization, as of January 2000
Legend
AIRSOUTH = Allied Air Forces, Southern Europe
COMKFOR = Commander Kosovo Force/International Security Force
NAVSOUTH = Allied Naval Forces, Southern Europe
SACEUR = Supreme Allied Commander Europe
STRIKEFORSOUTH = Naval Stiriking and Support Forces, Southern Europe

International Civilian Activities in Albania, Macedonia, Croatia, Serbia
(Excluding Kosovo), and Montenegro

This appendix discusses the programs that the international community,
including the United States, carries out to improve economic and political
conditions in the Balkans region outside of Bosnia and Kosovo, specifically,
in Albania, Croatia, Macedonia, Serbia, and Montenegro (see fig. 9).

Figure 9: International Civilian Activities in Albania, Macedonia, Croatia,
Serbia, and Montenegro
Legend
OSCE = Organization for Security and Cooperation in Europe
UNHCR = U.N. High Commissioner for Refugees

The activities of the international agencies in Albania and Macedonia
include providing and/or assisting with democratization and
institution-building programs, economic restructuring, and the development
and growth of the private sector. In addition, international agencies have
provided humanitarian assistance for refugees, asylum seekers, and host
families of refugees, to help Albania and Macedonia deal with the effects of
the Kosovo crisis. The Kosovo crisis had a particularly overwhelming effect
on both Albania and Macedonia. In Albania, one of the poorest countries in
Europe, the crisis led to an influx of nearly 500,000 Kosovo refugees
between March and June 1999. In Macedonia, the conflict led to nearly
300,000 refugees entering the country, hindered access to markets, and
blocked the movement of imports and exports. Macedonia has been affected
most severely by the cessation of economic relations with Yugoslavia,
previously Macedonia's largest trading partner and a conduit to other East,
Central, and West European markets.

International organizations have aimed primarily at developing democratic
institutions and practices in Croatia and assisting in the return of
refugees and displaced persons to their pre-war homes. The international
community has restricted economic assistance and development funding to
Croatia until it fulfills its commitments under the Dayton Agreement and
makes economic reforms.

The parliamentary and presidential elections in early 2000 have provided
great promise for a renewed commitment to political and economic reform in
Croatia. In response to the election results, the U.S. Department of State
has submitted a supplemental funding request for $35.7 million to encourage
positive political and economic change under the new government. The U.S.
government is considering extending other benefits as well, depending on
progress achieved in political reform.

Most international assistance to Serbia (excluding Kosovo) and Montenegro
has been limited by trade and visa sanctions imposed by the United States
and European Union in 1998 in response to the Yugoslav government's actions
in Kosovo. U.S. assistance programs, as well as those of the international
community, are structured around achievement of two strategic objectives:
democratization assistance aimed at increased, better-informed citizen
participation in political and economic decision-making; and humanitarian
assistance to help Serbia and Montenegro deal with the effects of the Kosovo
crisis. Activities related to these programs include encouraging the
creation of participatory and effective civil society organizations, a more
independent and responsive media, and legal systems that better support
democratic processes and market reforms and providing assistance for
refugees and internally displaced persons living in Montenegro and Serbia.
While the United States does not have a formal presence in either Serbia or
Montenegro, it does run a small assistance program for Serbia from U.S.
offices in Budapest, Hungary, and for Montenegro from a U.S. office in
Dubrovnik, Croatia.

The Stability Pact

The Stability Pact for Southeastern Europe is a framework for identifying,
discussing, and coordinating the developmental assistance needs of the
countries of southeastern Europe and accelerating and deepening the
integration of a reformed region into the Euro-Atlantic community(see fig.
10). According to a senior U.S. official, the Stability Pact is a political
commitment to a comprehensive, coordinated, and strategic approach to the
region. Initiated by the European Union on June 10, 1999, the Stability
Pact's major participants include Albania, Bosnia, Bulgaria, Croatia,
Hungary, Romania, Russia, Slovenia, Macedonia, Turkey, the United States,
Canada, Japan, the European Union, and several multilateral organizations
and lending institutions, including the United Nations, NATO, the
Organization for Security and Cooperation in Europe, the International
Monetary Fund, and the World Bank.

Figure 10: The Stability Pact
Legend
FRY = Federal Republic of Yugoslavia
FYR Macedonia = Former Yugoslav Republic of Macedonia

The overall objectives of the Stability Pact are to

· secure lasting peace, prosperity, and stability for southeastern Europe;

· foster effective regional cooperation and good-neighborly relations
through strict observance of the principles of the Helsinki Final Act of
1975;45

· create vibrant market economies based on sound macroeconomic policies; and

· integrate the countries of southeastern Europe fully into the European and
Atlantic cooperation structures, primarily the European Union.

To achieve these objectives, a governing body has been established, known as
the "Southeastern Europe Regional Table," to oversee three working groups,
called "working tables." The working tables have established workplans that
identify priorities as well as key initiatives and projects that they intend
to address.

In late March 2000, international donors pledged more than $2.3 billion to
Stability Pact projects aimed at developing infrastructure; promoting
private sector development; supporting policy and institutional reforms; and
encouraging democratization, reconciliation, and security. Included in this
amount is $1.7 billion devoted to financing a comprehensive "Quick Start"
package for regional projects and initiatives over the next 12 months.
Despite this funding, the Stability Pact may be unable to meet the growing
expectations of the countries in southeastern Europe. According to a senior
Stability Pact official, many countries in the region expect the Stability
Pact to provide a great deal of funding for an almost unlimited number of
projects.

U.S. Military and Civilian Costs for Operations in the Balkans, Fiscal Years
1992 Through 2000

This appendix contains detailed information on U.S. civilian and military
costs in support of Balkans operations and other activities to stabilize the
region from 1992 through the year 2000. Table 1 details the total Department
of Defense (DOD) and civilian agency spending in Bosnia and Kosovo. Table 2
delineates the total DOD and civilian agency spending in other areas of the
Balkans.

Table 1: Estimated Costs of U.S. Operations in Bosnia and Kosovo, Fiscal
Years 1992 Through 2000

  Dollars
     in
 millions
                                     Fiscal years
 Country   1992 1993 1994 1995 1996   1997   1998   1999    2000   Total
 Bosnia
 DODa      $6   $139 $292 $347 $2,520 $2,283 $1,963 $1,538b $1,603 $10,691
 Civilian
 agencies  c    c    c    c    560d   500d   301    295     211    1,867
 Subtotal  6    139  292  347  3,080  2,783  2,264  1,833   1,814  12,558
 Kosovo
 DOD       0    0    0    0    0      0      0      3,000e  2,025  5,025
 Civilian
 agencies  c    c    c    c    f      f      34g    256     302    592
 Subtotal  0    0    0    0    0      0      34     3,256   2,327  5,617
 Total     $6   $139 $292 $347 $3080  $2,783 $2,298 $5,089  $4,141 $18,175

aDOD costs from 1992 to 1995 include support for humanitarian airdrops over
Bosnia, operation of a hospital in Croatia, the airlift of food and supplies
to Sarajevo, enforcing a no-fly zone over Bosnia, and airstrikes in Bosnia
but do not include munitions expended in these operations. DOD costs from
1996 to 1998 include over $40 million spent on U.S. participation in a U.N.
peacekeeping operation in Macedonia.

bDOD's cumulative incremental costs as of September 1999 include Operation
Joint Forge and Operation Deliberate Forge.

cCivilian costs from 1992 to 1995 include funding from the State Department,
the U.S. Agency for International Development, and the Departments of
Transportation and Treasury for the former Yugoslavia as a whole and are not
delineated by country (see table 2).

dThis figure represents the State Department's cost estimate as of 1996. It
includes costs for the U.S. Agency for International Development, the U.S.
Information Agency, and the Departments of State, Agriculture, Commerce,
Justice, and the Treasury.

eDOD's cumulative incremental costs as of September 1999 include Operations
Balkan Calm, Joint Guardian, Allied Force, Eagle Eye, and Sustain Hope.

fAssistance in fiscal year 1996 and fiscal year 1997 is included in a U.S.
Agency for International Development estimate of total assistance to the
Balkans (see table 2).

gFigure includes civilian agency costs for all of the Federal Republic of
Yugoslavia, the bulk of which was dedicated to U.S. programs in Kosovo.

Sources: State Department and DOD cost estimates.

Table 2: Estimated Costs of U.S. Operations in the Balkans, Except in Bosnia
and Kosovo, Fiscal Years 1996 Through 2000

   Dollars in
    millions
                                        Fiscal years
 Country         1992 1993  1994  1995  1996 1997  1998  1999  2000 Total
 Albania         $45a $45a  $45a  $45a  $45a $44a  $31   $82   $36  $418
 Croatia         b    b     b     b     c    c     25    23    21   69
 Macedoniad      e    e     e     e     c    c     49    82    36   167
 Montenegro      e    e     e     e     c    c     f     39    51   90
 Serbia          e    e     e     e     c    c     f     21    33   54
 Regional
 civilian costs  121e 270e  667e  345e  100c 100c  98    261   241  2,203
 Total           $166 $315  $712  $390  $145 $144  $203  $508  $418 $3,001

aThe total U.S. assistance to Albania for fiscal years 1992 to 1998 is $300
million and for fiscal year 1998 alone is $31 million. To represent these
costs over several years, we have estimated that the United States spent an
average of $45 million each year for fiscal years 1992 through 1996 and $44
million in fiscal year 1997.

bDOD's reported incremental costs for the operation of a hospital in Croatia
in fiscal years 1992 to 1995 are included in its Bosnia costs (see table 1).

cBased on regional civilian costs in 1998 of $98 million, we estimated that
the United States spent $100 million in regional assistance to the Balkans
outside of Bosnia in 1996 and 1997.

dDOD's reported incremental costs for U.S. participation in a U.N.
peacekeeping operation in Macedonia in fiscal years 1996-1998 are included
in its Bosnia costs (see table 1).

eCivilian costs from 1992 to 1995 include funding from the State Department,
the U.S. Agency for International Development, and the Departments of
Transportation and Treasury for the former Yugoslavia as a whole and are not
delineated by country.

fCivilian agency costs for Montenegro and Serbia in 1998 are included under
Kosovo in table 1.

Sources: State Department and DOD cost estimates.

Comments From the Department of Defense

The following are GAO's comments on DOD's letter dated April 6, 2000.

1. We have deleted the word "abiding" from the slide to ensure that it is
not mistaken as a category of U.S. national interests.

2. We have clarified the text by specifying the three categories of national
interests to ensure that the term abiding is not included as a type or
category of U.S. national interests. We also added DOD's discussion of the
U.S. abiding interest in the Balkans to the text of the report on
page 61.

3. We modified the narrative on page 62 to say that the National Security
Strategy does not directly link humanitarian interests to the Balkans
region, although executive branch officials on many occasions have cited
humanitarian interests there. We also added to the text specific examples of
humanitarian interests from the strategy.

GAO Contacts and Staff Acknowledgments

Harold J. Johnson, Jr. (202) 512-4128
Judith A. McCloskey (202) 512-4128

In addition to those named, above E. Jeanette Espínola, M. Elizabeth Guran,
B. Patrick Hickey, and Jody L. Woods also made key contributions to this
report.

(711385)

Table 1: Estimated Costs of U.S. Operations in Bosnia and Kosovo,
Fiscal Years 1992 Through 2000 86

Table 2: Estimated Costs of U.S. Operations in the Balkans, Except
in Bosnia and Kosovo, Fiscal Years 1996 Through 2000 87

Figure 1: Estimate of Refugees and Displaced Persons Still Seeking Solutions
in the Balkans, November 1999 43

Figure 2: Distribution of Ethnic Albanians in the Former Yugoslavia,
as of February 1999 73

Figure 3: Map of Bosnia 75

Figure 4: Organization of Military and Civilian Operations in Bosnia 76

Figure 5: SFOR Organization 77

Figure 6: KFOR Brigade Sectors in Kosovo 79

Figure 7: Organization of Military and Civilian Operations in Kosovo 80

Figure 8: KFOR Organization, as of January 2000 81

Figure 9: International Civilian Activities in Albania, Macedonia,
Croatia, Serbia, and Montenegro 82

Figure 10: The Stability Pact 84
  

1. For purposes of this report, the Balkans region is defined as Albania;
Bosnia; Croatia; the Federal Republic of Yugoslavia (Serbia and Montenegro,
hereafter referred to as Yugoslavia); and Macedonia. Bosnia's official name
is Bosnia and Herzegovina. In 1992, Serbia and Montenegro asserted the
formation of a joint independent state called the "Federal Republic of
Yugoslavia," but this entity has not been recognized as a state by the
United States. "Macedonia" is an unofficial name for the state recognized by
the U.S. government as The Former Yugoslav Republic of Macedonia. The
Socialist Federal Republic of Yugoslavia, which dissolved in 1991, is
referred to in this report as the "former Yugoslavia."

2. The term "Yugoslav security forces" refers to the Yugoslav army and the
republic of Serbia's police.

3. The U.N. Security Council provided the current NATO-led force in Bosnia
with the authority to use force to enforce military provisions of the 1995
Dayton Agreement and force protection in Resolution 1088 on December 12,
1996. The U.N. Security Council provided the NATO-led force in Kosovo with
the authority to use force to enforce military and public security
provisions and force protection in Resolution 1244 on June 10, 1999.

4. The U.N. Interim Administration Mission in Kosovo, the lead civilian
organization in the province, has more responsibilities and authority than
does the lead civilian agency in Bosnia, in that the mission is responsible
for running all levels of government in Kosovo. The NATO-led force in Kosovo
also has more responsibility than its counterpart in Bosnia; specifically,
it is responsible for providing initial public security operations,
including all police activities, until the U.N. mission can assume those
roles.

5. The National Security Strategy lays out three categories of U.S. national
interests: vital, important, and humanitarian. The definitions of these
interests are provided in Briefing Section V. According to the strategy, the
decision to employ U.S. military forces is dictated first and foremost by
U.S. national interests.

6. We issued two interim reports during this period: one classified report
on NATO's operations and contingency plans in the Balkans, and an
unclassified version of that report titled NATO's Operations and Contingency
Plans for Stabilizing the Balkans
(GAO/NSIAD-99-111R, Mar. 11, 1999).

7. The sixth republic of the former Yugoslavia, Slovenia, was outside of the
scope of our review. The "Balkan peninsula" covers more countries than does
our definition of the Balkans region, including Bulgaria, Greece, Romania,
and Turkey.

8. "Macedonia" is an unofficial name for the state recognized by the U.S.
government as The Former Yugoslav Republic of Macedonia.

9. The United States and the United Nations do not recognize the Federal
Republic of Yugoslavia as the sole successor to the former Yugoslavia.
Further, the United States does not recognize it as a state.

10. This report defines "Bosniaks" as "Muslims," the definition used in
State Department human rights reports.

11. The other five major ethnic groups in the former Yugoslavia were
Slovenes (7.8 percent of the total population), Albanians (7.7 percent),
Macedonians (6.0 percent), Montenegrins
(2.6 percent), and Hungarians (1.9 percent).

12. In 1993, some Montenegrins in the republic asserted the reestablishment
of a separate Montenegrin Orthodox Church, which had been consolidated into
the Serbian Orthodox Church in 1920.

13. For purposes of this report, the term "Yugoslav security forces" refers
to Yugoslavia's military and the republic of Serbia's police.

14. This paragraph is based on data from the U.N. High Commissioner for
Refugees.

15. "The Dayton Agreement" is the General Framework Agreement for Peace in
Bosnia and Herzegovina and its supporting annexes. The U.N. Security Council
authorized this operation in Resolution 1031 on December 15, 1995.

16. The Federation had been established in March 1994. Prior to this, the
Bosniak and Bosnian Croat armies were fighting each other in central Bosnia.

17. This agreement is the "Undertaking of Demilitarization and
Transformation by the UCK." "UCK" is the Albanian acronym for the Kosovo
Liberation Army.

18. This is an important city due to (1) the presence of a large mining and
industrial complex and (2) the belief by many Serbs that the city should be
ethnically partitioned.

19. Many of these people left the province as Yugoslav forces withdrew. As
of
mid-November 1999, estimates of the number of Serbs remaining ranged from
60,000 to 100,000.

20. The poll of 3,000 refugees and displaced persons from Bosnia was
conducted in November 1999 by the Commission for Real Property Claims of
Displaced Persons and Refugees, at the request of the U.N. High Commissioner
for Refugees. The poll showed that about 76 percent of all Bosniak, 73
percent of all Bosnian Croat, and 36 percent of all Bosnian Serb refugees
and displaced person respondents wished to return to their prewar homes.

21. In addition, the number of people who registered as returning home
across ethnic lines increased from 15,531 in 1998 to about 31,234 in 1999, a
trend cited as positive by U.S. and international civilian officials in
Bosnia.

22. The proposed state border service would be a national-level institution
whose duties would include, among other things, police surveillance of
Bosnia's borders, control of cross-border traffic, and search for persons
within the border zone. The service's ethnic composition would be based on
Bosnia's 1991 census data.

23. This primary responsibility for public security, referred to as "police
primacy," includes control of the following: enforcing criminal codes,
conducting investigations, making arrests for criminal offenses, and
providing community interface. KFOR plans to transfer primacy to the
international police in stages and sector by sector as the U.N. police
develop sustainable posts, communications, and detention facilities.

24. These units have been described as constabulary- or gendarmerie-type
units, that is, groups of soldiers serving as an armed police force for the
maintenance of public order.

25. After the drawdown, the United States will have about 4,600 troops in
Bosnia.

26. A U.N. official told us that the mission initially decided to make this
request after being informed that SFOR troops may be delayed in responding
to violent incidents against U.N. monitors due to the reduced number of
troops available.

27. The U.N. mission in Bosnia includes the International Police Task Force,
a police monitoring mission of about 1,800 unarmed police. Because the force
is 300 personnel below its authorized strength, the U.N. mission could
establish the proposed armed protection group without increasing its
authorized personnel levels.

28. KFOR's peak strength was about 51,000 troops during late August 1999 due
to overlapping troop rotations.

29. The operation plans for the NATO-led forces contain the most permissive
rules of engagement for countries participating in the forces. The plans
also permit each participating country to issue clarifying instructions to
ensure compliance with national law.

30. As of March 1999, the U.N. mission consisted of over 1,500 international
civilian personnel plus about 2,390 international civilian police.

31. According to a senior U.N. official in New York, the United Nations was
informed on
June 8, 1999, that it would lead the international civilian effort in
Kosovo. This was 2 days before the U.N. Security Council passed the
resolution that established the U.N. mission. According to DOD, the United
Nations was unofficially informed of the potential for this mission during
May 1999.

32. See appendix I for a map showing the distribution of ethnic Albanians in
the former Yugoslavia.

33. According to a January 2000 report by the Council on Foreign Relations,
the region's average per capita gross domestic product is less than 7
percent of the European Union's average. Per capita gross domestic product
in the region ranges from an estimated $400 in Kosovo to about $4,500 in
Croatia, continuing an historical pattern of economic disparity in the
former Yugoslavia.

34. These solutions include humanitarian/refugee status, other resident
status, resettlement, and repatriation.

35. About 64,500 Croatian Serbs had returned to Croatia as of November 1999,
out of an estimated 300,000 who had fled the country.

36. A large obstacle to the return of Croatian Serb refugees is that Bosnian
Croat refugees occupy their homes in Croatia. Under Croatia's current
property law, if alternative accommodations cannot be found for the current
user of the property, the property is not returned to its rightful owners.
In February 1998, the Republika Srpska Prime Minister set a goal of
returning 70,000 non-Serbs to their prewar homes in Republika Srpska.
However, as of the end of 1999, only 19,975 non-Serbs had returned.

37. According to the High Representative, Bosnian Croats, who currently can
hold dual citizenship in Croatia and Bosnia, must select one country for
citizenship by 2003.

38. The United Nations has estimated that 60,000-70,000 ethnic Albanians
live in southern Serbia near its border with Kosovo. (See app.1.)

39. A National Security Strategy for a New Century (Washington, D.C.: The
White House,
Dec. 1999).

40. Although the executive branch initially said that the U.S. military
mission in Bosnia would be limited to 1 year, the Bosnia and Kosovo
operations now have missions of indefinite duration.

41. The strategy defines the "Balkans and Southeastern Europe" as Albania,
Bosnia, Bulgaria, Croatia, Macedonia, Romania, Serbia and Montenegro
(including Kosovo), and Slovenia.

42. As used in this report, "incremental costs" are those costs that would
not have been incurred if it were not for the operation. It should be
recognized that DOD's financial systems cannot reliably determine costs and
only the total obligations are captured by DOD's accounting systems. The
services use various management information systems to identify incremental
obligations and to estimate costs. Although we use the term "costs" in this
report, in the case of DOD, we are actually referring to DOD's obligation of
funds.

43. According to a senior SFOR officer, these percentages reflect tactical
situations that dictate heightened force protection measures; the general
situation for U.S. troops in Bosnia requires a significantly lower
percentage of the force to be dedicated to force protection. Further, the
U.S. military is reducing the number of soldiers dedicated to guarding base
camps by installing electronic surveillance and monitoring devices to
provide early warning.

44. Because the warring parties were unable to agree on which of Bosnia's
ethnic groups would control the strategically important area in and around
the city of Brcko, the Dayton Agreement instead called for an arbitration
tribunal to decide this issue. On February 14, 1997, the tribunal called for
the international community to designate a supervisor under the auspices of
the Office of the High Representative, who would establish an interim
supervisory administration for the Brcko area. In the final arbitration
award of March 5, 1999, the tribunal determined that the international
supervisory regime must continue in force indefinitely in the Brcko area and
gave the supervisor responsibility for scheduling and implementing the
establishment of a new "Brcko District of Bosnia and Herzegovina." The
district was established on March 8, 2000.

45. The Helsinki Final Act of 1975, also referred to as the Helsinki
Accords, is a nonbinding agreement that outlines a broad basis for peaceful
relations in Europe. It includes provisions related to confidence building
measures, commercial exchanges, and human rights.
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