(Updates with demonstrations in third, ninth paragraphs, comment in 18th paragraph.)
June 3 (Bloomberg) -- The capture of war-crimes suspect Ratko Mladic may help break a deadlock over a new government in Bosnia-Herzegovina, where the ex-Bosnian Serb commander engineered Europe’s worst bloodshed since World War II.
Mladic, 69, refused to enter a plea during an arraignment today in The Hague on charges of genocide during the 1992-1995 siege of Sarajevo and the massacre of about 8,000 men and boys in Srebrenica. Bosnia-Herzegovina has been without leadership since October elections as Bosnian, Serb and Croat representatives squabble over power sharing.
The May 26 arrest, which touched off pro-Mladic protests in the region, may eventually ease ethnic tensions still seething in Bosnia-Herzegovina as policy makers work to put the violent breakup of Yugoslavia to rest and make compromises over regional ties, political scientists said. The country is the second-poorest former Yugoslav republic behind Kosovo as it struggles to draw investors to an unsettled political environment.
“There is a new momentum created by Mladic’s arrest because it shows the idea of peace is gathering strength and the idea of justice as well,” Mirko Pejanovic, the dean of the Faculty of Political Sciences in Sarajevo, said in an interview. “The central administration could be put in place by the end of the month.”
Political instability is holding back Bosnia’s efforts to keep up with its neighbors in strengthening ties with the European Union.
Slovenia, the first to break from Yugoslavia, is already a member and neighboring Croatia expects to finish negotiations with the trading bloc this year. Serbia, meanwhile, is counting on Mladic’s capture to help it start entry talks by the end of the year.
Bosnia-Herzegovina, a country of 3.8 million residents, is still divided along ethnic lines drawn up as part of the U.S.-brokered Dayton Accord signed in 1995.
The predominantly Serb region, called Republika Srpska, and the Muslim-Croat Federation of Bosnia-Herzegovina each run their own governments, assemblies, police forces, courts and other organs of state and wield more power than central institutions.
Unrest in Banja Luka
In Banja Luka, the administrative capital of Republika Srbska, about 10,000 people protested on May 31 for a second time, supporting him and condemning Serbian President Boris Tadic for allowing his arrest, raising concerns about further ethnic strife. Those followed protests in Belgrade, the Serbian capital.
Bosnia, whose $17 billion economy is about the size of Honduras, is under orders from the International Monetary Fund to keep a lid on public spending, which accounts for more than 40 percent of total output, according to the central banker Kemal Kozaric.
Its jobless rate at 27.2 percent is among the highest in the region and its economy advanced 0.9 percent last year after emerging from the deepest slump since the end of the war.
“From the end of war, we hoped this would somehow be finished,” said Sehida Abdurahmanovic, the leader of an association of mothers who lost relatives after Bosnian Serb forces overran the town, which was considered a UN safe haven. “We hoped life would get better.”
Spending austerity is hindering the reconstruction of the country 16 years after the war. Srebrenica, in eastern Bosnia close to the Serbian border, once had the fourth-highest per- capita income in Bosnia and still bears the scars of battle.
“Srebrenica was economically very strong before the war,” said Abdurahmanovic. “We attracted people from all over Yugoslavia as there were plenty of jobs.”
Now, the town is “dead,” said Abdurahmanovic, whose husband, brother and other family members were killed, as she stood in a memorial park outside of Srebrenica honoring the victims.
“There are no investments in this region for Srebrenica to get back on its feet,” she said. “There are few young people here, not many children and it shows that it’s difficult to live here.”
Rallies of support for Mladic in Republika Srpska have angered other nations because “they are saying that all their kids should be like Mladic,” Abdurahmanovic said.
“They are not denying what they did and they are not ashamed and they don’t feel any remorse,” she said in the interview. “This is something unbelievable to other nations in Bosnia that they are filling their kids with hatred towards other people. This is something I will never understand. ”
Breaking the political deadlock would unlock international aid and attract further foreign investors to Bosnia, the EU representative for Bosnia Valentin Inzko said in an interview last month.
“We still live with communist-era water pipes, communist-era roads and other infrastructure from that period,” said political scientist Pejanovic, who is an ethnic Serb and was a member of the Bosnian presidency during the siege of Sarajevo.
Easing the ethnic bitterness that permeates politics and social life may linger even after reconstruction.
Aida Sekulovic, a 74-year pensioner who relies on help from her relatives abroad, said she’s still angry.
“There is still rage in me, but I know that it’s the young that need to be taken care of, they need jobs and a brighter future,” Sekulovic said in an interview on a Sarajevo street.
--Editors: James M. Gomez, Alan Crosby
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