This article does not have permission of the copyright owner, but is
being offered for comment, criticism and research under the "fair use"
provisions of the Federal copyright laws.
Source: Free Bosnia Group

by Graham Ennis

ABSTRACT: This report was written after returning from a visit to Bihac Canton North Bosnia at the beginning of September.
It was decided that the humanitarian situation after 1201 days of siege of the enclave was little known to external NGO's and other bodies.
A gross discrepancy was found between UN and ICRC external reporting and the actual internal Bihac situation.

Little effort had been made by UNHCR and ICRC to coordinate, collect, or collate vital core data re the humanitarian crisis.Large discrepancies were noted in areas such as the provision of medical supplies and shortages of same.

ICRC had not established nutritional survey of local population. Local population suffering malnutrition. Multiple other instances of lack of base data and awareness by above bodies generated this report.

Report is supported by officials of local Bihac municiple administration. Urgent needs are listed and priorities established for avoiding humanitarian disaster in Winter 1995.

Outline draft recovery program for 1996 is established together with the external funding required in hard currency to avoid collapse of civil society in Bihac during 1995/96.

Report contains multiple humanitarian warnings re specific crisis areas such as epidemics, elderly, child nutrition, mortality rates (Estimated) for Winter 1995 etc.

Report copyright is waived for free distribution ASAP to all NGO sources and Govermental aid bodies re Bosnia.

Replies to:

VOX TEL:[44] [0] 273-775326 [INTERNATIONAL CALLS]


part 1:


Graham Ennis

This report was written following my return from the enclave of Bihac,
North Bosnia, on the 3rd September, 1995. Since then the recent military
operations have drasticly changed the situation in North Bosnia, with
the recovery of considerable amounts of its territory by the legitimate

However, the on-going situation of basic needs in the Bihac area is
essentialy unchanged in its fundementals by the present situation.
There is still a crisis of basic needs and economic collapse.If anything,
the demands made by the movement of refugees back to their homes in
the recaptured areas of Bosnian territory will lead to further demands
on an already overstretched infrastructure.

Some 100,000 people may attempt to return this Winter to homes and towns
that are semi-devastated by the Chetnik occupation.

The human needs requirements for the whole North Bosnia area are
therefore several times that of those included in this report.

With a humanitarian crisis on this scale, only direct action by the
European Union will resolve the matter.


Subsequent to the recently terminated siege of the Canton of Bihac,
North Bosnia, this rapporteur visited the area.

This is a preliminary report and observations concerning the socio-economic
situation in the Canton, together with an outline proposal for a
single-integrated operational plan for recovery in the post-siege phase.

This report and proposal will be subject to considerable expansion in scale
and intensification of detail in the near future, and is of an interim
nature only.
Conclusions and opinions are preliminary only, and subject to revision.

This report is divided into three parts:


Bihac Canton is a small enclave of Bosnian territory at the extreme tip
of North Bosnia. It is the size of a very small American State. (Rhode Island).
Total population is approximately two hundred thousand, of which some twenty
five thousand are juveniles.
Prior to hostilities, the area had substantial agricultural, industrial,
and service sector economic activity, and was prosperous.The developmental
level of the enclave was akin to that of some areas of the European Union.

At commencement of the War, the enclave was closely invested by the
so-called "Serbian Republic of Bosnia". (See map).

The siege lasted some twelve hundred and one days.

Recent Republic of Croatia military operations have terminated the siege,
but the enclave is still very isolated. Access is only by means of a single
small road to the town of Karlovac, in Croatian territory.

Access is controlled and regulated by Croatian Forces.

The present situation can be characterized as one of disaster recovery.
A brief sectorial summary is made below of the present situation.

Damage varies from slight to very severe, depending upon sector.
This is summarized below:

Public Utilities:
These are functioning only partially, or not at all.

Piped water and sanitation appear to be operational in Bihac town,
but no information was available with regard to other enclave areas.
Water supply is believed to be variable in quantity and quality elsewhere.

Electric Power:
Pre-war, some 90% of capacity was supplied from Banja Luka. Enemy activity
has completely terminated this supply. Total pre-war electrical demand
was 120 Megawatts for the Cantonal area. Some installed hydro capacity
remains on the Una River. This is small, comprising a total system of
two units, of 6+2 megawatts.(8Mw total).
Due to damage and lack of spares, the functional day-to-day output is
seldom above 50%.

The only other source of electrical power in the enclave is the small
pool of portable and static diesel electrical generators, both public and
private. These seldom have a capacity above 100 kilowatts, and often are
of less than 10 kilowatts output.

Power distribution from the public network appears to be restricted
to the town of Bihac itself.

Phone service (Including international calls) has recently been restored
to the outside world, via Croatia.

NOTE:All utilities are in a state of dis-repair and partial functionality.
There are local areas of breakdown within the utilities systems, and
absence of service provision.

Physical Assets:
Some war-damage is apparant to buildings, enterprises, and roads etc,
but is limited. A considerable portion of the town of Bihac has escaped
serious damage from military action. It is believed that localized areas
of the enclave also have some damage. This is particularly so to the
North of the area.

The health delivery system has continued to function without
serious interruption, although at very reduced capacity and with
very very serious shortages in some sectors. These shortages are of
both manpower and material, especially fixed-asset equipment and
consumable supplies.

The health system is not in danger of near-future collapse or
severe dysfunction, but is unable to provide a full and proper service,
or any service at all in some medical sectors. There are very serious
concerns for the future.

Health personnel are at the limits of functionality and there is a
realistic danger that a marginal crisis could lead to a progressive
collapse in the future, on a time-scale of some months.

Sanitation services continue to function in most areas, but with
localized lack of provision and operation.
As with other utilities, the waste water and sewage system lacks
maintenance and is operating at the margin of functionality in some areas.

From data supplied by the Una River Womans Association, a picture
emerges of widespread social deprivation. (See section on social services).
The existing social-work system has managed, with declining resources,
an excellent system of care provision. Provision for war-orphans has been
excellent, but the scale of demand for assistance for the frail and
elderly totally exceeds the capacity of the local government provision.

From detailed data supplied by the Ministerium for Education Bihac,
an exact estimation can be made of the situation. Effectively,
Educational provision is in total crisis, and has effectively collapsed.
Lack of material, education resources, and budget, has terminated all
but informal educational activity in the enclave. (See section on education).

Public Administration:
The public administration, both at Cantonal and local level, has continued
to operate. The local Government functions, and controls services.
There are a nucleus of very dedicated and energetic cadre led by senior
officials of considerable ability. Public administration however is beset
with very considerable difficulties. The most outstanding of these is that
officials and personnel are functioning on a semi-voluntary basis,
without income. The last payments of salaries in Bihac were some
seventeen months ago.

Economic activity of a conventional kind has effectively collapsed.
Nearly all industrial workers are unemployed, there is very little
service sector activity, and there is only residual circulation of
money (Mostly in German currency). The public administration and military
provide some form of income, (mostly in kind,) for a percentage of the
population.There is some trading in goods and services, at a very low
level. However, except in agriculture, the Bihac economy is operating at
perhaps 10% of prewar capacity and per-capita product, in all sectors.
There are no longer any significant financial resources in the Cantonal
area, no liquid cash, and almost no Bosnian currency.

The lifting of the siege has resulted in some very small-scale,
localized recovery, with informal trading, barter economy operations
and the circulation of small amounts of German currency.

In general, the Bihac economy may be characterized as having collapsed
into a subsistence mode, barter economy, with only limited recovery
to date.Without substantial injection of external resources, the prognosis
is disastrous.

During the siege, both UNHCR and the ICRC continued to operate,
but under some difficulties.provision of both medical and food aid
by these agencies has kept the enclave functioning, but at a survival
ICRC have informally indicated that they intend to cease operations
in the enclave in some sixty days.There will then be a serious crisis
of resources in the provision of medical services.

UNHCR will continue to function, but the resources provided by UNHCR,
even of basics such as food, do not meet minimal emergency requirements,
let-alone form the basis for any large-scale recovery.

This rapporteur had extensive discussions with the local administration
and representatives of Public institutions and Non-Governmental

Due to the very considerable abilities of the local leadership cadre,
it was possible to obtain their agreement to the formulation of a
properly structured plan for recovery, which would become both a
vehicle for reconstruction, and a resource for external aid agencies
and authorities.

The Mayor of Bihac, Mr Adnan Alagic, has committed himself to the
development of a S.I.O.P. (Single Integrated Operational Plan)
for Bihac recovery.

This concept is strongly supported by the administrative cadre
in Bihac, and By NGO institutions such as the Womans organizations.
This report and recommendations is intended to generate such a plan
as a discrete and urgent project during the next thirty days.

1:To generate within thirty days a preliminary S.I.O.P. for Bihac.
Sectorial responsibilities will be allocated by Bihac authorities to
specific external NGO agencies, in key areas, such as health and education.

2:It is essential that there is proper external coordination of these
agencies.Therefor in Britain the Embassy of Bosnia should assign a
specific attache for recovery operations in Bihac.(Recommendation).

Urgent action is required in the following areas:

A:Casualty MEDIVAC.
The Rapporteur established the location of forty seven critically
injured and acute cases held in the Bihac hospital system.Fifteen
acute cases were below the age of eight, and are a priority.Strict
application of Triage could reduce these cases by only some 20%.
Collapse of some medical sectorial services, such as neuro-surgery,
results in total lack of provision of specialist treatment, and a
poor mortality prognosis.

This Rapporteur is making very considerable efforts to effect the
MEDIVAC of these cases.(See appendix of case histories).

Urgent MEDIVAC as soon as possible of the Juvenile cases to European
Union based locations for intensive care and recovery.

B:Medical staff.The local hospital has lost, through attrition during
the siege, a considerable portion of its skilled surgical teams.
There is still adequate provision in some areas, but there is a very
urgent need for neurological services.

Urgent provision of a volunteer team of surgeons and ancillary staff
for a period of twelve months, from European Union.

C:Medical material:
A critical shortlist of required medical consumables and fixed
equipment is appended.There is a considerable discrepancy between
the stated provision of material by ICRC and UNHCR, and the urgent
needs of the Bihac hospital system observed by inspection by this

Urgent action to fund from E.U. and U.K. programs the provision of
the required material, on a sixty day time-scale.


Most urgent is action to secure energy supplies for the coming Winter.
The previously discussed deficiencies of the electrical power
distribution system will become critical at that time.There is an
operational plan to import electricity into the enclave from Republic
of Croatia.This however is unrealistic.The stated timescale of thirty
days for provision of a 100 Mw. cable system some 100 Kilometres in
length is doubtful.Given utilization of previous distribution
infrastructure, and provision of short lengths of new cabling, limited
power importation may be possible within some 100 days.

Given that the pre-war per-capita electrical energy consumption
was approximately 120Mw. (0.6Kw per person) and that this included
industrial useage, there is little scope for reduction in the energy

As an absolute minimum, 20% (approx. 25Mw) of pre-war installed capacity
is required as grid capacity.this would do no more than restore domestic
supply on a limited, interuppted basis, with very strict power rationing
and absolute priority for essential users such as the cantonal
administration and Public Institutions.

Some 8Mw of this requirement can be met from the existing Una river
hydro capacity, given serviceability can be restored.The total energy
output of the hydro-plant is equal to some 12,000 metric tons of fuel-oil
substitution per year.

There is some limited scope for micro-hydro projects in Bihac, limited
to another 4Mw in toto.These could be rapidly executed in some 100 days
with temporary log and earth dams and Swedish turbines.The remaining
capacity requirement must be met from thermal power generation by means
of portable diesel generator plant, imported into the enclave.

This in itself is not difficult, given the loan from E.U. sources of
several 2/3 Mw mobile turbo-generators, and ancillary provision of some
20 small (100 to 500Kw) diesel mobile generators as well.However,
the total energy requirement for this installation equates to fifty
metric tons of light liquid hydro-carbon fuel per diem for a limited
supply of ten hours per day, of 12Mw.

This in turn is a total fuel requirement of some 18,000 tons per annum.

The critical energy problem for Bihac is not therefor power generation
or technical plant, but fuel security and fuel importation.
Given the volatility of relations with Republic of Croatia, from where
all importations must come, fuel security is unrealistic.The problem
of fuel supplies, and security of supply, must be tackled at European
Union level.

1:Most urgent action for E.U. to supply technical service team and funds
for spare-parts to restore output of Una-river Hydro-plant to full 8Mw
capacity within 60 days.

2:Urgent feasibility study within thirty days of remaining marginal
capacity of Una river system to sustain additional micro-hydro projects,
with temporary log and earth dams and imported turbines.E.U. funding for
construction of small micro-hydro network.

It should be noted that this proposal is very ecologically sensitive
to the Una River.Great care must be taken, even under war-time emergency
conditions, not to damage the eco-system and esthetics of the river system.

3:loan from sources of E.U. member states of mobile turbo-generators
(Capacity total 10Mw) and mobile diesel generators (Capacity total 3Mw)
and of technical installation teams and work crews.

4:Establishment of a strategic Winter fuel reserve for Bihac Canton of
1000 Metric tons. (E.U. funded).

5:E.U. technical team to conduct detailed study within sixty days of
power distribution system of Bihac, in conjunction with local technical
cadre, and recommend an emergency recovery plan for the power
generation/distribution system.

Winter Fuel Requirements.

In addition to the above minimum recommendations, urgent consideration
must be given to the supply of Winter fuel for the civil population and
public institutions.

Almost the entire population has reverted to wood-burning in primitive
home-made stoves for all domestic heating and cooking. Little use is
made of other means.
The long-term effects of this are the stripping of the tree-cover of Bihac
for fuelwood and serious ecological degradation.

A foreign aid program to provide supplies of light-oil or propane stoves,
with ongoing supply of fuel, for domestic use, is an urgency.
Fabrication locally of energy efficient simple steel appropriate technology
stoves is also feasible.

For public institutions, the most urgent need is the provision as
foreign aid of large-scale industrial capacity oil or propane stove
units.This is particularly urgent for the Hospitals and Schools of Bihac.

Additionally, there is a critical need for the supply of a stockpile of
heating oil for the school systems and Hospitals. (The existing heating
systems are undamaged.They require only cleaning and fuel to work.)


1:Hospital Winter fuel stockpile: 1000 metric tons.
2:School Winter fuel stockpile: 2000 " "
3:Public institutions allocation: 1000 " "
4:Public Administration allocation 500 " "

4500 Metric tons total

The emergency energy needs of Bihac for Winter 1995 therefore total,
(including strategic reserve) some 5500 metric tons of liquid
light hydrocarbons.

Additionally, to implement the minimal plan for a 25mw grid distribution
for 10 hours per diem will require some 9000 metric tons.

The total minimum energy requirement for Winter 1995 is therefore calculated
at 14,500 metric tons of liquid hydrocarbons .(Calorific value equal
to no:1 light diesel).

Costs:There is no local funding.Urgent consideration to the funding of
this program as an emergency project should be given via E.U. sources.

This rapporteur was able to make a basic assessment of the food situation
from discussions with Cantonal/local government and direct observation
and visits to private homes in the enclave.

The situation is severe.
1201 days of siege have left the general population in a disastrous
state.Malnutrition is widespread.Adults and children alike are very
mal-nourished.deficiency diseases are rife, and the average child in
Bihac is 7Kg underweight. Immune system deficiencies leave the general
population, especially the young, very vulnerable to infections.

Although the food situation has improved, and food is now available,
prices are totally beyond the means of the mass of the civil population.
In rural areas, the population are able to subsist to some extent from
local produce, and nutrition is better.However, in the urban population,
almost total reliance will be necessary for at least the Winter of 1995
on foreign humanitarian food aid.

It is therefor of considerable concern that food aid deliveries are
running at less than the minimal calorific requirement for the enclave.
A typical UNHCR shipment will contain some 100 metric tons of supplies.
However the daily requirement, to supply 1500 calories per capita and
build something towards a strategic reserve, is approximately this amount.
UNHCR are not making these minimum daily totals.

The supply of private food shipments from Croatia is increasing,
which must lead to an eventual fall in prices, but is subject to
dislocation of supply.

During Winter 1995-1996 serious and sustained efforts must be taken
to implement an organized emergency food program for Bihac.
The present supply via International Institutions is inadequate,
and will lead to further mal-nutrition.

1:food security.
As an absolute priority, an emergency stockpile of food for Winter 1995
must be established.This must be under the control of the Cantonal
civil authorities.
This can be achieved by the release (Gratis) from European Union
agricultural intervention storage of (De minima) 6000 metric tons of
dried food staples.

This should be transported by rail freight to Karlovac rail-head and
expedited onwards by large freight truck to Bihac.The total amounts to
some 250 truckloads.(25 trucks X 10 days freightage).

ODA (U.K) have indicated no objection to freighting this food to Bihac
via existing transport fleet, providing UNHCR authorization is given.

The quanta of 6000 tons of dried food gives an allocation of
emergency food of 20Kg per family per month for 6 months only.
The calorific value is less than 600 calories per head per diem.
These are absolutely minimal quantities.

Bihac civil population:
strategic stockpile 6000 Metric tons.

Food deliveries to civil
population.(70% of requirement) 12600 " "
[Per diem ration 1200 calories]

Total emergency food programs
for 1995-1996 18600 " " Total

Present scale of deliveries:
(Predicated onto Winter 1995) 4800 " "

Calculated total food shortfall
for Winter 1995/96 is therefore: 13800 Metric tons.

Some of this shortfall will be made up from private market supplies.
Socially vulnerable, elderly and poor elements of the civil population
will not have acess to this source of supplemental food, and will suffer
further severe malnutrition.There will be some cases of starvation this
Winter, with related deaths.

WINTER FEEDING PROGRAM.(Rapporteurs opinion).

A minimum decent and adequate release of food from E.U. intervention
stores of some 15,000 metric tons will provide total food security for
the Winter of 1995 for Bihac enclave.

The very poor condition of the children of the urban poor was noted
by this Rapporteur: In addition to the above feeding program,
a supplemental program to provide each juvenile with a daily hot-drink
consisting of 1000 Milligrams of pure Vitamin C base,
10,000 milligrams of glucose base and 50 grams of dried orange
fruit extract is urgently needed. Together with provision for
pregnant and feeding mothers, and frail elderly, the supplementary
nutrition needs of Bihac for Winter 1995 are:

Vitamin C base.Powder(Pure) 10,000 Kg.

glucose extract.powder(Pure) 100,000 Kg

citrus fruit dried extract. 500,000 Kg.

Total requirement 610,000 Kg.

Additionally, there is a further urgent need for the supply of
multi-vitamin tablets for the entire juvenile and elderly population.
In particular, the supply of vitamin B-complex is urgent.

Dried Milk:
The minimum quanta of food for the humanitarian/E.U. program
does not contain any allowance for supplies of dried milk for
baby-food, the elderly, etc.

The minimal quantities for Bihac are some 1500Kg per diem,
to cover the above categories.Total Winter 1995 dried milk
requirement is therefore :

Winter dried milk requirement: 1500X30X6=270,000 Kg.

These quantities are absolute minima.The above ad-hoc calculation
may be on the low-side, but this is offset by local sources and
private market supplies.

Dependence on local agricultural production to substitute for
humanitarian aid in this special supplementary feeding category will
result in mass child-malnutrition this winter.

To prevent this, E.U. humanitarian support is essential.

The Cantonal and local administrations have made efforts to establish,
piece-meal, some of the urgent needs outlined above.There is an almost
total lack of resources and material locally with which to implement
any of these projects.

The Bihac town Municipal authorities have outlined a minimal feeding
program for the local residents, who amount to some 15,000 families.
This program is minimal, giving about 11/12 Kg per month per family of
foodstuffs and some small quantities of soap, salt, toothpaste, etc.

The Mayor of Bihac, Adnan Alagic, is attempting to interest foreign
NGO institutions in this program.There has been little or no success
so far.

The school system has also attempted to establish a program for
Winter 1995 of a similar nature, giving each child a hot drink and
about 500 calories per diem who attends school. similar problems
exist for this program, which is at present unimplementable.

To implement the Bihac municipal feeding program, the following
quantities are required:

Flour 450 metric tons.
sugar 90 " "
edible oil 180 " "
pasta base 90 " "
detergent 90 " "
soap 45 " "
tinned food 180 " "
rice dried 180 " "
liquid detergent 90 " "
dried milk powder 90 " "
shampoo 45 " "
toothpaste 45 " " 90K units(Tubes)
salt 90 " "

TOTAL TONNAGE 1665 metric tons.

This would implement for Winter 1995 the municipal emergency program.

Observations:These amounts are totally inadequate. They amount to about
25% only of minimal calorific intake for survival during the coming Winter.

Projected upwards at 100% sufficiency for the entire cantonal
population, some 26,640 tons of supplies would be required.

This compares with the estimated winter food requirement of some
18600 metric tons at 70% sufficiency.

since 70% of above = 18648 tons metric, there is very close agreement,
(Within 50 tons) of the estimates made independently by this Rapporteur
and the Cantonal authorities needed for survival during Winter 95/96.

Such a level of convergence and agreement from independent calculations
is remarkable. Considerable reliance can therefor be placed in these
estimated emergency calculations for supplies.


Severe malnutrition and, in some cases, outright starvation will
ensue during Winter 95 unless this report is vigourously implemented
in full within sixty days.

Winter 95/96 Mortality rates:

non-implementation of the suggested supplemental feeding program
will generate an estimated 100 juvenile deaths due to vulnerability
to infections that will arise in consequences.

Adult (Non violent) mortalities can be estimated as most serious
amongst the elderly. Given an absence of respiratory virus epidemics
(Flu, colds, etc) basic deaths amongst the elderly will amount to
at least 1000 this winter, due to malnutrition, hypothermia, and
ancillary causes. The incidence of any serious flu epidemic in the
civil population, may increase the elderly and juvenile mortalities
by an order of magnitude.

Further increase of mortality rates will occur unless the estimated
shortfalls of food reported here are made up. The effect of these
shortages may be as severe as that of a flu epidemic, or worse.

An approximate mortality estimate for Winter 95 for war-related
deaths in Bihac is therefor:

1:Infant and child mortality........100 deaths.
2:Elderly mortalities..............1000 " "
3:Misc. fatalities(Civilian)........400 " "

The best case scenario for the Winter 0f 95 is therefore some 1500
deaths from a population of 200K. That is to say, these deaths are
additional to the actuarial norms of the death rate in Bihac.

The worst case scenario however is of considerable concern.
A bad winter, low temperatures, lack of humanitarian relief supplies
of food and fuel, and any kind of supplemental preventive feeding
program, combined with a widespread respiratory virus epidemic,
may increase these quanta by an order of magnitude.


Urgent preventative action is needed now to implement this report
and avoid this.These deaths are entirely preventable.

As reported earlier in this report, economic conditions are severe.
The formal economy, based upon monetary exchange and the generation of
high added value goods and services, has effectively collapsed.

The Bihac enclave has been without an effective supply of currency for
about a year.the last payment of salaries to professional cadre was
some 17 months ago, in Bosnian currency.All such cadres are working on a
voluntary basis, and for humanitarian food parcels.

There is some limited circulation of German currency, most of which is
restricted to the "Black" economy and the local black-market.

there has been no issue of Bosnian currency to local financial institutions
by the National treasury for over 18 months.

The financial institutions themselves have effectively ceased all
operations. Banks are closed and the staff dispersed. Credit cards
are not accepted, and all transactions are in hard currency or barter.
Most trade is restricted in scale and location, and is of a subsistence

Bihac can be characterized as having a post-disaster survival economy,
in which the mass of the population have no acess to money and are
reduced to barter-exchange.

In economic terms, Bihac has returned to the dark-ages.

There are some limited signs of recovery, insomuch as limited supplies
of fuel are entering the enclave, transport is moving (buses!) and
private trading has started.However, the great part of the population
are excluded from even the informal subsistence economy, and entirely
dependent on a mixture of humanitarian aid, savings (Almost depleted)
and help from relatives abroad.

Unemployment is almost total, in the sense that few people have formal
conventional employments, for salaries paid in currency. Some twenty-five
thousand industrial workers are without formal work.

the lack of electrical power, raw material stocks and spare-parts to
repair war-damage and neglect makes restarting of production very

Moreover, Bihac remains an island enclave adjacent to a war-zone, with
limited external acess to the wider World.

An additional problem is that even if output is restored, it is of goods
and services that cannot be traded locally on any significant scale,
and are unsuitable for the external market.

In short: Little can be made.that which can is unsaleable externally,
except upon very adverse terms of trade.

The agricultural sector:
This is in better order, as food production has continued during the
siege. However, declining inputs of energy, pesticides and fertilizers
has reduced the agricultural output.production methods (And output)
have in many areas reverted to 19th century levels.

Farmers have considerable difficulties, as they have no longer have
any formal financial system to which to resort to fund purchase of
inputs such as fuel and fertilizers.

The limited sectorial analysis made above is characteristic of all
sectors of the economy.urgent action is needed to prevent further
economic collapse into a localized economy resembling that of a
third-world state such as Zaire.

Recovery programs cannot await post-war time-scales.Urgent and immediate
emergency programs must be instituted to prevent the Bihac economic
situation affecting all other attempts to continue the existence of
an ordered society in Bihac enclave.

(E.U. Humanitarian program).

1:The immediate grant of a hard-currancy fund to the cantonal
government of Bihac of 50 Million DM to fund the continued existence
of an ordered, formal administration and government in Bihac enclave.

This will enable the local government to survive and pay minimal salaries
to its personnel, fund and resource essential emergency activity related
to this, and start planning on a longer term basis.the need for this
fund is illustrated by the experience of this Rapporteur, who observed
that stocks of even elementary material such as paper, pens,
type-writer ribbons, light-bulbs, etc for the local Government are
almost exhausted.There are no funds available to buy them.Supplies are
available only for hard-currency.

2:The establishment of a subsidy for an E.U. origin bank to open and
operate in the enclave, to provide a functioning financial institution.
Formal currency transactions could then resume, and credit logistics
be solved.
Such a subsidy might be limited to as little as DM 2 million per year,
for operational costs.

3:Establishment of an emergency agricultural grant-in-aid fund. This
will enable the resumption of formal cash farming.
Allocation: 5 million DM.

4:Technical assistance and grant-in-aid for the establishment of a
system of credit-unions, linked to the Bank. Allocation: 5 million DM

5: Emergency hard-currency soft-loan to the cantonal Government of
20 million Dm over ten year term of loan.

The above emergency economic program totals 50 Million DM in grant aid
and 20 million DM in loans.

Further financing in the form of an emergency public works fund for
the canton, of some Dm22000000 as grant-in-aid.

The total injection of liquidity into the local system is therefor for
1995-1997 92m Dm.

Per capita liquidity is expressed as 460 DM.

Currency bills in circulation (Addendum) approximately 5 million DM.
The rest is characterized as credit/ledger transactions.

It should be noted that instituting an E.U. based financial institution
will instill a level of confidence not existing in any local financial
There are considerable levels of "Black" hard currency within the
enclave.A substantial portion would become bank deposits and be available
to the local economy under this plan.

The E.U. financial institution (Bihac) should be an operating subsidiary
of an established E.U. bank, but should also establish a subsidiary
institution, incorporated in the E.U. and operating in Bihac upon
Government Licence.Such an institution should be incorporated and
limited in liability.

A suggested title for this institution is "Bank of Bihac".

It is further suggested that the "Bank of Bihac" may issue Dm
denominated script and bank treasury notes, exchangable for German
currency.The ratio of liquidity/deposit could then be considerably

The above emergency recommendations are the minimum needed to resolve
the present economic crisis of the Bihac enclave.

It is pointless to continue injections of external food and medical aid
into the territory if something is not done, as a matter of absolute
urgency, to stabilize the enclave financially and provide a basis for

As previously stated, the education system is in total crisis, and has
almost collapsed.There are almost no supplies of educational material,
such as paper, pens, etc.Textbooks are in short supply, outdated, and
often badly worn. The teaching staff are unpaid, and subsisting on
humanitarian aid.The schools have no supplies of fuel for heating,
and will be unable to operate during severe winter weather.Some schools
have war-damage.

After intensive discussion, the Rapporteur presents on behalf of the
Education ministerium, Bihac, the following

1:To secure opening of the schools, fuel security is essential.
As quantified elsewhere, the provision of a stockpile of heating oil
is essential.Many Bihac homes have little or no proper winter heating.
In minus forty Celsius temperatures it is essential that small children
have a daily period of time in a warm place such as a school.

2:The previously described emergency supplementary feeding program
for children be initiated and administered via the educational system,
as an urgent preventative provision.

3:The emergency grant-in-aid requested for the Cantonal government to
have some 20% of the funds ear-marked and ring-fenced for the urgent
provision of emergency educational aid.

Together with the provision by E.U. sources of heating fuel, this will
enable the re-opening of the education system for Bihac this Winter.

In order to implement this emergency action report, consideration should
be given to a delegation of the Cantonal and local government in Bihac
visiting both the European Parliament and London.

It is suggested that this visit should take place in Late October 1995.

The purpose of this delegation is to make detailed and developed proposals,
originating from this plan, directly to the International and national
institutions, Government ministries, and European Parliament, that will
require external foreign funding.

A separate and detailed delegation itinerary will be prepared for this
program at a later date.

Bihac canton

1:This section of the report, which is predicated upon a 100 day
timescale from 1st November 1995, evaluates and summarizes the essential
tasks required to move from the immediate emergency recovery phase to an
intermediate program phase.

To start any kind of coherent recovery program, without first collecting
and collating the essential social and econometric data, is impossible.
Absolutely essential to the formulation of any plan is the organization
of the fundamental database.

To do otherwise will lead to misuse and waste of scarce resources,
bad judgements made from insufficient information, and duplication
of effort.

The extant vital planning data in Bihac Canton is of variable quality
and quantity.In some sectors, such as education and health, there is an
excellent basis for appraisal of planning tasks.

Also, in energy, some sectors of social programs, and use of foreign
aid, there is some good ad-hoc data.The problem is that it is being
used in a disconnected manner, for local and immediate tasks, and not
for any coherent overall recovery plan.

The primary proposal of this Rapporteur is therefor that a planning
conference be held in Bihac as soon as feasibly possible, with
delegates from all sectors of the Cantonal administration, to assemble
and collate data and recovery tasks.

It is very strongly recommended that representatives from the Foreign
Embassies in Zagreb involved in the delivery of foreign aid should be
invited to attend the plenary session, and working liaison relationships
with these officials established.

Key NGO representatives and local officials of UNHCR and ICRC should
also attend.

The use of the standard UNESCO classification index for the structuring
of the social and economic sectors to be tasked is recommended.

The planning and organization of this conference must form the basis
of a separate paper, and is treated here only in outline.

It is suggested that this conference should take place in November 1995.

2:In parallel with the organization of the recovery conference, and its
sectorial plans, some immediate tasks should be put into action by the
Cantonal Government.

These are:

1:Cantonal census.[This should be a statistical estimated census,
not a full census.Such a census would be accurate to within about
5% of data.] Such a census is essential to the calculation of relief
and recovery efforts.

2:Manpower survey.
This should be divided and defined as estimated employment in formal
and informal sectors, unemployed manpower, and sectorial information on
manpower usage in the Bihac economy.

Secondly, as an absolute essential task, there should be a survey and
census of the total manpower reserve in Bihac of the Higher-level
scientific and technological manpower, that is available and willing
to take part in reconstruction.

3:Survey of the economic infrastructure.
Analysis of the war-damage sustained and estimates of the required
repair and maintenance operations required to place the remaining
industrial capacity on a pre-production readiness basis.

Also some calculation should be attempted of the inputs of raw material
and energy required for part-production and basic start-up again,
together with an analysis of possible product output.

Priority allocation of energy, raw material, and manpower must be estimated
for the most effective re-start at a base level of local industry.

A planned system of rationing, licensing and resource allocation by
local government should be planned and put into place on a reserve
basis, with regard to basic economic activity in the formal sector
of the Bihac economy.

It may prove essential in the primary phase to apply this strictly.

Public works program.
4:A work-program of reconstruction labour, to soak up the pool of
unused manpower and re-activate the labour force, should be studied.
This program should be by voluntary participation, and paid for from
a special aid donor budget. There are a considerable number of public
works tasks in Bihac that have been neglected for almost four years.
They are essential to reconstruction of the local economy and are
within the remit of the Cantonal Government.

Resource Planning
An essential component of the recovery program is therefor some
degree of labour-planning, man-power allocation and resource distribution,
together with data base collection and collation.

All of the above are essential primary tasks for the local administration,
which must not be neglected.

It will be essential to be able to demonstrate to any foreign aid donors
that proper planning for allocation of aid has been done.Failure to do so
will restrict and delay aid from donors, or result in aid withdrawal.

As an essential part of any integrated recovery program, the Cantonal
administration must themselves identify as an urgent task their priorities
and key programs, on basic timescales of 100 and 300 days.

Such planning must take place as soon as possible, with regard to basic
presentation to possible foreign donors being done at the November 1995
reconstruction planning conference.



This section of the report is divided into three parts:

1:Budget analysis.
2:Foreign aid donor identification and sourcing.

3:Report summary.

1:Budgetary analysis:
This will be done by sector.Each sector will be identified by reference
to the standard report headings in the balance sheet

The proposed budget is at present a nominal one, prepared by this
Rapporteur to establish both the scale and operational sectors that
require funding.It is urgent that precise quantification is made in
detail at an early date of the budget structure and program by input
from Bihac Cantonal authorities.

An outline sectorial budget, (Education) is detailed by way of example.
Other sectorial financial/operational plans are outlined as proposals

It is proposed that this entire emergency budget will have all
allocated funds supplied by foreign-aid donation.
The European Union is identified as the lead donor.
European Union funds are assumed to be generated via the formal
process of allocation form the E.U. Commission Humanitarian Aid Unit.

Secondary funding is predicated upon multi-lateral donor contributions
from E.U. member governments.Tertiary funding is designated at
approximately 5% and via NGO institutions.

Budgetary requirement is related to currency funds, but incorporated in
this report are material aid requirements, such as fuel and food.
These are separately identified in the budget by source and
value, at cost.For simplicity, all transactions are accounted in
German Currency.

This comprises the following tranches:

Emergency European Union grant-in-aid:.......Dm50000000
" " " " " Soft-loan:..........Dm20000000
" " " " " Public works.....:..Dm22000000

TOTAL FUNDING........Dm92000000

OTHER FUNDS(Institutions)
Private (NGO) FUNDS...........................Dm 1000000
Banking operations grant-in-aid...............Dm 2000000
Private banking deposits (Dm) [E.U. bank].....Dm 5000000



Funds are assumed to be channelled to Bihac via direct funding from
Mode of funding may be against European commission grant and multilateral
donor funds held upon deposit with the Bank.The Bank thus acts as
reserve for the Bihac banking operations.The system of accounting,
audit, and report is thus greatly simplified.

Actual circulation of currency is by the separate establishment of a
5 million Dm German currency fund, operated by the E.U. banking entity,
Bihac.This fund will rotate and will require periodic servicing from
central funds in specie/and/or currency.

The establishment of a proper technical banking relationship with the
European Bank cannot be underestimated in future utility for the
reconstruction of the Bihac Cantonal zone.

For security, balances are assumed to be held centrally by the disbursing
Bank, except for a liquidity fund in currency held locally. All other
transactions are assumed to done by ledger transaction.


Local Government budget expenditure, 1996.


Anticipated expenditure upon capital items in 1996 by Bihac Cantonal
authorities from external funds will be limited.Suggested priorities
need to be clearly established for absolutely essential items only.
Funding only of spare-parts for vehicles and essential equipment,
transport and other items must be identified.

No other capital expenditure should take place.At this stage of the
1996 budget development, capital items are not identified separately,
but are summarized globally as a single balance-sheet item.


(Core Budget expenditure)


As previously referenced in this report, the education program for
Bihac 1996 is an emergency program only.Basic policy is to re-open
the schools, and restart operations on a limited curriculum, which
is restricted by lack of educational materials.

No significant capital expenditure is expected.

Primary expenditure is split between consumables (Educational material)
and salaries.Education Cadre are to be paid minimal part salaries in
currency.A special Cadre food distribution program for essential
workers will operate within the school system, on a formalized basis.
This is an income supplement equivalent.

Particular emphasis is made of the special needs programs for
traumatized children, educational welfare programs, and the supplementary
in-school nutrition program.

Total educational staff(Teachers & ancillary)
Estimated at................................. 1500

1:Basic salary provision:(Per mensum)............Dm120
2:Special responsibility payments & +50%. for 20% of staff.
3:Educational material expenditure is capitized at Dm240
4:Special hardship fund for cadre.
5:Supplementary feeding program funded & 250Dm per capita per annum.


Total salaries for 1996......................Dm2376000
Special hardship fund (Staff)................Dm 600000
Total educational material for 1996..........Dm6000000
Supplementary feeding program................Dm6250000
Essential repairs & maintenance..............Dm1200000
Emergency reserve............................Dm 500000
Administrative costs.........................Dm 750000
Civil defense................................Dm 120000
Educational health & welfare programs........Dm 100000
Special educational needs provision..........Dm1200000

TOTAL 1996 BUDGET.......Dm18646000


The budgeted emergency Welfare program for Bihac is distinct from
the existing local provision.It should be seen as operating as both a
supplement, and operating in parallel with, the existing social protection

The program should be structured with the strongest orientation towards
the most socially vulnerable groups.
Co-ordination with the special food program, medical program and economic
program is therefor assumed and required.

The primary requirement is the identification of the population sector
of the urban poor, elderly single people, and socially deprived families
with dependent children.An absolute priority should be given to these
dependent categories.

Little accurate data was available to this Rapporteur on the sectorial
size and classification of these categories
during his visit.An approximation has had to be made, using socio-economic
statistical norms from European data.Errors are therefor probable, but are
not likely to be gross in scale.Approximations will be accurate to
>< 15% of true data.

The base data assumption was that "Total elderly (Plus 60 years) is in
gross equivalency with the number of Juveniles (< 18 years) with a
weighting factor of 150%.

This conforms with the Western European statistical norm
.Bosnian social factors will probably result in this being an

Total base is therefore calculated at
ELDERLY (+60yrs) = 25K x 150%= 37,500.

Vulnerable percentage of this social group were estimated at 70%.
Therefore total sector size was estimated at 0.7 x 37,500 = 26,250.

Vulnerable juveniles were estimated at 50% of sector.

Total vulnerable juveniles = 12500.

Pregnant women and nursing mothers were estimated at 3% of female population.
(3000 women). Vulnerable percentage estimated at 70%.

Total vulnerable females = 2100.

Medically vulnerable estimated at 5% of population.(Defined as
non-hospitalized but chronic/acute/persistent medical conditions
or disabilities.)

Total medically vulnerable = 10,000.

The sectorial estimates for socially vulnerable persons in Bihac,
(Estimated) are therefor:

FEMALES............ 2100


This as a percentile of total enclave population, is 22.9%.
Very near a quarter of the total population can therefor be
categorized as being in a socially vulnerable condition.This does
not include those who are categorized by one or more serious indicators,
(Such as partial malnutrition or other problems.Using these criteria,
almost 70% of the population would be included).

In simple terms, this is the "Bedrock" core of the consequences of the war.

The percentile groups and distribution shown above can be further
sub-catagorized by special needs.Some persons may have several
category entries, E.G., a sick, juvenile pregnant female.Categorisation
therefor leads to rating needs by scoring percentile entries.

budgeted resources should be allocated by this method.

Total per capita expenditure (Averaged) & Dm200.

Catagory expenditure:


TOTAL AVARAGE.........Dm200

TOTAL DIRECT EXPENDITURE 1996........Dm9170000

EXPENDITURE by classification:

FEMALES...............Dm 630000


Operating at a minimal client/staff ratio of 50/1 required
staff are 917 + 90 supervisory and 10 executive.

Total welfare staff predicated at 1017 persons.

Salary scales as per standard:


Total salaries for 1996.............Dm1536480
Special hardship fund (Staff).......Dm 400000
Total material resources............Dm 458500
Supplementary feeding program.......Dm1146250
Essential facilities expenditure....Dm 600000
Emergency reserve...................Dm 250000
Administrative costs................Dm1375500
Civil Defence.......................Dm 240000
Educational Health & welfare progs..Dm 183400
Special supplementary programs......Dm2200800
interprogram support funds..........Dm 779070

TOTAL 1996 BUDGET.........Dm9170000


The administrative crisis in Bihac, which is caused by almost
total absence of resources and budget, must be resolved.Failure
to do so will result in progressive degradation of the already
limited ability of the administration to function. All cadre are at
present essentially unpaid lack of such basic
items as writing materials,(Already reported) will mean that the
administration will eventually operate in a sub-sistance mode.
Ordered government in Bihac will be endangered.

This financial program is the core program of these proposals.
Without a functioning civil administration, future recovery will be
almost impossible.These provisions are EMERGENCY ones. Without
administrative capacity, all other programs in this report are at risk.

This in turn places some 70% of the civil population of the enclave
at risk of some social catastrophe.

Administrative programs have been cut to the absolute minima for
survival of an effective local government.

Total administrative personnel 1500. [NB this is de minima].

Core tasks only are to be undertaken.

The total administrative budget is not apportioned here between the
Cantonal and municipal authorities.Only the calculated global minimum
provision is defined for the entire population of the enclave.

Per capita expenditure................Dm41.31

Total salaries for 1996......................Dm2376000
Special hardship fund (Staff)................Dm 800000
Total administrative material for 1996.......Dm 300000
Essential repairs & maintenance..............Dm1400000
Emergency reserve............................Dm 500000
Regional fund................................Dm 100000
Civil defense................................Dm 100000
Internal welfare program.....................Dm 100000
Special operations provision.................Dm1500000
Capital equipment (Computers)................Dm 187500
Other capital items..........................Dm 250000
Utilities....................................Dm 150000
Transport & communications...................Dm 500000
TOTAL 1996 BUDGET........Dm8263500


The Cantonal government special food program is based upon the
previously proposed recommendations of this report.Provision of
food resources as calculated in the main body of the report from
external sources and funding form the core of the program.

The value of the total food stocks supplied is estimated at a median
value of Dm1200 per metric ton.Foodstuffs are limited to basic
commodities only.A restricted list of items limited to those on the
municipal feeding program are the stock items.

The value of the foodstocks supplied as supplements to the estimated
shortfall from UNHCR sources only is calculated.


Total value at Dm1200 per ton: Dm16560000.

The value of the special supplementary nutrition program is calculated
separately: 2000 Dm per ton at 610 metric tons.

Total value spec. nut. prog. Dm1220000

Total value of foodstocks (A+B) = Dm17780000

(This costing is for offset against E.U. intervention fund account).

The local food program budget is essentially a distribution budget.
Internal transportation of food stocks within the enclave and
administrative costs are the core items. The allocated sums are Dm4 per
person per month for the total civil population.

Total food program budget therefor Dm9600000 per year.

This program and budget is predicated upon continued UNHCR food aid during

UN withdrawal will have a catastrophic effect on this program.


To support the continued existence of the health delivery system at
anything above an absolutely basic emergency service provision,
a substantial program will have to be mounted.

There are now critical shortages of material, equipment, and personnel
within the system.(See report).To sustain the present operations and
provide some basis for future recovery, the system, which is being run
by the cadre on a subsistence basis, must be formalized, with minimal
salaries, small budgets for essential local expenditure, and substantial
external aid in re-equiping the system.

An appended list of core medical equipment and needs has been supplied
to this Rapporteur by the local administration.No inclusion of these
items is made in this budget.They are assumed to be 100% external

Budget identified herein is for local expenditure only .

total medical personnel 1000. (Includes all ancillary and support staff).

The primary mission of the health delivery system for 1996 is defined as:

1:To stabilize facilities and services and prevent further deterioration
of the system beyond hope of viable future recovery.

2:To lay the basis of a proper program of sector development and
recovery of services in sectors, (Such as neurological services) that
have collapsed.

3:To begin the planned implementation of a general upgrade of health
services and facilities by replacement and repair of damaged facilities
and equipment, in-service training and development, and staff turn-over

To do this a stabilization and development program needs to be created
and prepared for implementation for 1996.

The predicated budget for this is indicated below.

Total salaries for 1996......................Dm1512000
Special hardship fund (Staff)................Dm 500000
Total administrative material for 1996.......Dm 300000
Essential repairs & equipment................Dm6000000
Emergency reserve............................Dm 500000
Training fund................................Dm 100000
Public safety................................Dm 100000
Internal welfare program.....................Dm 90000
Special medical programs.....................Dm1500000
Capital equipment (Computers)................Dm 150000
Other small capital items....................Dm 250000
Utilities....................................Dm 150000
Transport & communications...................Dm 600000
TOTAL 1996 BUDGET........Dm11752000


The public safety program is essentially an interface program with other
existing provisions for the protection of the civilian population, civil
and public institutions, and the economic and administrative
infra-structure.As such it adopts primarily an information strategy.
The program is to identify in International literature and institutions
the key material and publications relating to civil defence, together
with the relevant consultant expertise.The dissemination of this program
by a specialized local government unit to the public in Bihac is the core

Protection of human life and infrastructure from war-effects is the
raison' d'etre of this program.

This is an emergency reserve fund for the financing of war-effect
induced emergencies in Bihac, such as rapid response to mass airstrikes,
heavy shelling, etc, which may require special funding on a short-term
basis not otherwise allocated for in other budgetary programs.


The core budget items defined in the preceding section of the report
are absolutely essential to the continued existence of an ordered
society in Bihac, and the stabilization of the humanitarian situation
at a level able to sustain survival.

In this section are defined the budget and treasury items, together
with the program outlines, for the secondary budgetary expenditures.

These expenditures are also of very high priority, and represent the
minimum required to progress the Bihac situation beyond 1995 with any
real hope of viable recovery in a reasonable timescale.

Failure to implement these programs through lack of funds will not only
have direct humanitarian costs, but will have considerable material and
financial costs for aid donors, such as the E.U., at a later date, during
the post-war reconstruction phase.

This due to the steep decline in the recoverability of the economic base
and infra-structure that will happen if some of these emergency aid funds
are not forth-coming from foreign donors.




The agriculture sector, as reported elsewhere, is in crisis.lack of
finance for essential inputs has reduced production and distribution

It is essential that a system of emergency grants is implemented for
the agricultural sector, together with local government agricultural

Where possible, as a matter of policy, credits are to be preferred to
grants, but low take-up may require some implementation of grant-aid,
probably in conjunction with credit acess.Any credits should be granted
upon very soft terms, with a careful structure and network of
agricultural extension officers and experts directing the program.

Almost total lack of data on this sector has meant that only a gross
global estimate of demand is possible.

Therefor only a global budgetary figure is appended, without a
detailed budget synopsis.


This is recommended by this Rapporteur as the key program for economic
stabilization in Bihac Canton, together with the public works program.

The present economic (Catastrophic) situation in Bihac must be
urgently addressed.the implementation of several of the economic
programs outlined in this report will do no more than give a reasonable
chance of stabilization from further deterioration.

However, one of the fastest ways to do this is by micro-economic inputs
into micro-enterprises.

The creation of a system of credit unions, for the financing and
creation of craft-based and labour intensive service and micro-scale
industrial enterprises, will generate rapid positive economic activity.

Such enterprises are remarkable for their very high capacity to
create jobs, both formal and informal, full and part-time.

The economic regeneration and recovery which is so urgently required
in Bihac will be greatly facilitated by this program.

No detailed synopsis and budget are presented here at this time.


The infrastructure of Bihac has survived remarkably well, as far as
physical plant are concerned.It is believed that upwards of 60% of
the industrial base is completely undamaged.Damage to the rest is
believed to be limited in extent, except for some localized areas.

However, the previously described damage to the public utilities,
the lack of financial services and funds, and the lack of external
access from Bihac has brought industrial economic activity to a

the administration of this budget by a joint E.U. and local
government planning and assessment team would however lead to
important reductions in the delays for reconstruction at a later

Multiple small grants and credits to enterprises would enable them to
at least safeguard existing plant and facilities, return to a proper
"Care and maintenance" basis, and prepare forward plans for the
restart of production.


This program overlaps to some extent the remit of the industrial program.
However, its main purpose should be as enabling funding for the
managerial, technical and administrative cadre of the local industrial
base to prepare and implement detailed product and production plans for
external E.U. funding.

This will enable bids to be made for foreign aid for industrial
reconstruction and recovery to be made in the most efficient and
practical manner possible, with good cooperation with external expertise
and agencies in the European Union, very careful research, and a
coherent strategy for all industrial sectors.


This program is not only one of pre-recovery operations, but of social

As reported previously, the very severe social deprivation in Bihac,
with large sectors of the population without any formal work or income,
must be tackled rapidly and effectively.

this program will inject into circulation in the local economy the
bare minimum of cash liquidity to move from barter trade in personal
transactions to a simple cash economy again, at least for those who

Because of limitations of funds and consequent limitation of work-numbers,
the available work should be shared by rotation.Three month programs,
to give everyone a chance of earning some small income, as an
alternative;/and or supplement to humanitarian aid, are essential.

This program is based on a labour program of some ten thousand persons.

Essential tasks carried out as public works are a matter for the
local government, but in general, environmental protection, road
maintenance and other similar works are evisaged. some thought needs
to be given to imaginative programs that will aid the future social
and cultural development of Bihac and motivate the workforce.

Total salaries for 1996......................Dm15840000
capital equipment............................Dm 1500000
Total administrative costs...................Dm 350000
Manual equipment.............................Dm 600000
Emergency reserve............................Dm 500000
Training fund................................Dm 500000
Recruitment ................................Dm 100000
Internal welfare program.....................Dm 1000000
Remedial medical programs....................Dm 200000
Capital equipment (other)....................Dm 150000
Other small capital items....................Dm 250000
Utilities....................................Dm 250000
Transport & communications...................Dm 900000
TOTAL 1996 BUDGET........Dm22140000

This is thus the largest budget item for emergency foreign aid.


This report has been written on an emergency is not, with the
very limited resources of this Rapporteur, as comprehensive as the crisis
in Bihac requires it to be.

From the limited scope of this report however, a very clear outline
impression can be formed of the Bihac situation.The prognosis is not

Having survived a 1201 day siege, the people of the enclave have been
reduced to an existence level which is now generating a series of
discrete secondary crisis in every sector of Bihac society and economy.

The technical infrastructure of Bihac enclave has been almost
completely disrupted.Resources of material have been almost totally
consumed during the siege, and the health of the population is
depleted by malnutrition.

The ability of the "System" to survive in Bihac is constrained by all
these factors.

Put simply, Bihac has hit bedrock.

This report and recommendations can do no more than express the essential
factors of this situation.

The budget and aid proposal, which has been as carefully prepared as
time will allow, indicates the sheer scale of the problem.The financial
aid indicated will do no more than stop the systematic collapse during
the forthcoming year of an ordered civil society in Bihac enclave, and
preserve a base from which future post-war recovery can begin.

Failure by external authorities to implement a substantial faction of
these recommendations in time will lead directly to such a disaster

It is therefor essential that E.U. and other sources are made aware
of the situation.


The implementation of the basic tasks of this report will require fast
and urgent responses from potential donors.
Given these time constraints, it is suggested that the main tranche of
funding must come from within Europe, from E.U. formal funding

The identified funding path is therefor from the European Union
humanitarian aid budget, which is administered by a discrete
administrative unit in Brussels.

This Rapporteur has already initiated discussions on an informal
basis with E.U. officials to establish the potential for action and
the speed of response.

The submission of a formal emergency application must come primarily
from Bihac Cantonal authorities, and attempts are being made to
establish guidelines and format for such an application.

A deadline of 1st January 1996 for the commencement of any such
emergency aid program has been set for the purposes of such an application,
in order to emphasise the extreme urgency of the situation.


This section will establish the outline parameters for the long term
recovery planning that needs to be done for Bihac'.Given the severity
of the present crisis, such long term planning might seem futile.
But to think so makes all short term planning futile, because it is an
admission that there is, for Bihac, no future.

From the darkest days, to a new Dawn.We owe this to the people of Bihac.
There is an obligation not only to plan for the future, but to believe
in it.

On that basis, further sources of aid have been identified which are of
intermediate or longer-term time-scale, of some months six to eighteen
months or more.

These aid sources are summarized below in shortform.

Most of these aid sources are at present blocked with regard to
application of funds in Bosnia.A decision has been taken at Council
of Ministers level with regard to this, not to extend development
funding to Bosnia during the continuation of hostilities.

It is probable however that at a future date all of the programs listed
below will be extended to Bosnia, either in their existing form, or in
a special program format specific to Bosnian needs.

However, given the severe nature of the internal situation in Bihac,
it is both possible and probable that
the presentation via political channels via the European Parliament
of an urgent case for support might reverse this decision.

Whilst such a process is unlikely to yield any substantial funding until
the post-war phase of recovery, there is a strong possibility that
funding might be released for the conduct of planning and feasibility
studies.The timescale of such a process, which is unknown, is probably
three to six months, at the very earliest.A further substantial delay
whilst program planning and implementation is undertaken will occur.

Funding from this source befor January 1997 is therefor very unlikely.
However advanced planning studies for these programs should begin now,
in a small-scale way, in order to secure future development and recovery
programs with the shortest possible delay.



The Business Cooperation Centre is a central clearing house which
performs non-confidential partner searches on behalf of SMEs
(Small and Medium Enterprises) who wish to cooperate with other
businesses on technical, commercial and financial operations.
Company profiles are disseminated to a network of more than 340
professional correspondents located in nearly 50 E.U. and third

The Business Cooperation Network helps businesses, particularly SMEs,
to identify other enterprises with which they can cooperate on a
regional or trans-national basis.The scheme consists of a computer
based network linking over 500 business advisers throughout the E.U.
and in more than 20 non-member countries who compile confidential
computer profiles of clients activities and compare them against other
profiles in a central database maintained in Brussels.Matching profiles
are examined by business advisers and potential partners put in contact
with each other.


This is by means of the E.U. system of "Framework" programs for
collaborating research in Science and technology by member states.
However, the program has been broadened to include Eastern European
states as well.

Framework programs are conducted in series.The fourth framework program,
(1994-1998) provides for 13 research programs and three additional
program related areas.

E.U. funding is approximately 50% of costs, with the rest being met
from commercial collaborating partnerships.

Of programs applicable to Bihac, areas covered include:
Industrial and materials technologies.