The divide reaches into all aspects of life. In the city of Mostar, “everything is double, every activity, every firm: We have two different companies picking up garbage, Komos in the [Bosniak] east, Parkovi in the [Croat] west,” said Đenan Jelin, an activist. “The education system in the city is divided: The east uses Sarajevo’s syllabus, the west Zagreb’s.” A secondary school in Mostar that offers vocational training in transportation studies “teaches two shifts, one in the morning for Bosniaks, and another in the afternoon for Croats,” Jelin added. Bosniak students call the street the school is on Šantićeva, its pre-war name, rather than Mile Budak as it is now officially known. Even the school has two names—mašinsko-saobraćajna škola in Bosnian and prometna škola in Croatian—and two quite different websites.
This doubling-up of everything can seem comic. But the system entrenched by Dayton has done serious damage to Bosnia’s development. “The political caste uses Dayton to stay in power,” explained Nermina Mujagić, a political-science professor at Sarajevo University. “Dayton is a convenient scapegoat to justify why nothing is being done to address the plunder of the state’s assets and pervasive corruption.”
The process of post-war privatization is a case in point. The prospects at first seemed promising: In a 1997 paper, the European Commission and the World Bank found that “only a small portion of the overall industrial capacity has been damaged” by the war. Foreign experts prescribed a “complete overhaul,” in the form of privatization and other economic reforms, wrote the EastWest Institute in a report that same year.
Naturally, the Federation and Republika Srpska each created its own privatization agency, but for once the result was identical: the systematic transfer of assets into the hands of war-profiteers and politicians, as well as their families, friends and cronies. Too often, the new owners had no interest in restarting industrial production. Instead, they sold the machinery when possible, disposed of the rest as scrap metal and put up the land for either rent or sale. Entire industries were turned into housing or commercial estates, hotels, and malls.
De-industrialization and massive unemployment ensued. Damir Miljević, the advisor for privatization to the Republika Srpska prime minister in 2001, calculated that out of 1,200 privatized industries in the entity, just 10 have survived. Inequality is rampant: By some estimates, 300 people in Bosnia have €7 billion in assets, while 40 percent of the population is unemployed, and youth unemployment is over 60 percent, the highest rate in the world. The young and educated leave Bosnia for better prospects in the EU.
To date, with rare exceptions, no one has been held accountable for the privatization debacle. And while International Monetary Fund keeps the state on life-support with injections of money, the political elites buy social peace by dispensing jobs in exchange for votes. Miljević, the former advisor, called it “vote hiring.” “If the [Republika Srpska] Ministry of Finance had 78 employees in 2005, today it has 280, and this after relinquishing some of its responsibilities. … This is the case across the spectrum in government institutions,” he said.