[Senate Hearing 108-194]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-194

  THE SUCCESSOR STATES TO PRE-1991 YUGOSLAVIA: PROGRESS AND CHALLENGES

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 25, 2003

                               __________

       Printed for the use of the Committee on Foreign Relations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate



90-513              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001


                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
MICHAEL B. ENZI, Wyoming             RUSSELL D. FEINGOLD, Wisconsin
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
LAMAR ALEXANDER, Tennessee           BILL NELSON, Florida
NORM COLEMAN, Minnesota              JOHN D. ROCKEFELLER IV, West 
JOHN E. SUNUNU, New Hampshire            Virginia
                                     JON S. CORZINE, New Jersey

                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                 ------                                

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                    GEORGE ALLEN, Virginia, Chairman

GEORGE V. VOINOVICH, Ohio            JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska                PAUL S. SARBANES, Maryland
JOHN E. SUNUNU, New Hampshire        CHRISTOPHER J. DODD, Connecticut
LINCOLN CHAFEE, Rhode Island         JOHN F. KERRY, Massachusetts

                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................    19
Jones, Paul W., Acting Deputy Assistant Secretary of State for 
  Europe and Eurasia, Department of State, Washington, DC........     8
    Prepared statement...........................................    11
Nash, Major General William L., USA (Ret.), John W. Vessey Senior 
  Fellow and director, Center for Preventive Action, Council on 
  Foreign Relations, Washington, DC..............................    32
    Prepared statement...........................................    34
O'Brien, James C., principal, The Albright Group, LLC, 
  Washington, DC.................................................    36
    Prepared statement...........................................    39
Serwer, Daniel, director, Balkans Initiative and Peace 
  Operations, U.S. Institute of Peace, Washington, DC............    27
    Prepared statement...........................................    29
Voinovich, Hon. George V., U.S. Senator from Ohio, prepared 
  statement......................................................     6

                                 (iii)

  

 
  THE SUCCESSOR STATES TO PRE-1991 YUGOSLAVIA: PROGRESS AND CHALLENGES

                              ----------                              


                        WEDNESDAY, JUNE 25, 2003

                               U.S. Senate,
                  Subcommittee on European Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SD-419, Dirksen Senate Office Building, Hon. George Allen 
(chairman of the subcommittee), presiding.
    Present: Senators Allen, Voinovich, and Biden.
    Senator Allen. Good afternoon, everyone. I call this 
hearing of the European Affairs Subcommittee to order. Today we 
are here to address, review, and to discuss the progress that 
has been made in the Balkans, as well as some of the challenges 
that remain in that region.
    We are pleased to be joined by Mr. Jones, who is on the 
first panel, Deputy Assistant Secretary for the Department of 
State, as well as on the second panel Mr. Daniel Serwer, 
director of the Balkans Initiative and Peace Operations at the 
U.S. Institute of Peace, Mr. James O'Brien, principal with the 
Albright Group, and Major General William Nash, the John Vessey 
Senior Fellow and director of the Center for Preventive Action.
    This situation in the Balkans has improved significantly 
from my perspective from the days I visited there back about 
this time of the year in 1997. I was Governor of the 
Commonwealth of Virginia and went there to see Virginia Guard 
troops who were stationed in Doboy in Bosnia. They were called 
in to assist in peacekeeping efforts with troops from Poland 
and Sweden and Denmark, and it was an interesting combination 
of effort. It was a very sobering experience to visit with 
those men and women who were attempting to keep the peace in an 
area with such violent strife as a result of such deep-seated 
hatred and animosities and ethnic tensions and historic 
territorial disputes that have been going on for hundreds of 
years.
    I also recollect how they said, ``do not ever get off the 
road because you will step on a land mine, possibly.'' I also 
recall saying, boy, that's good-looking bottomland, farmland 
there, and they said yes, it is, but a farmer just 3 weeks ago 
was blown up and died with a land mine. There were and probably 
still are millions of land mines throughout that region, but 
through the strong leadership of NATO and the perseverance of 
the United States and our European allies in the EU we have 
seen these tensions dissipate, and I'm specifically speaking of 
Bosnia and also Kosovo as well.
    The key is that the principle of representative government 
has taken root in most of the Balkan nations, and I believe the 
United States and our allies can take a great deal of 
satisfaction in the successes enjoyed in the Balkans in recent 
years, and while strides have been made in democratic and 
economic reform, and they have been impressive, we are reminded 
that our combined focus and attention cannot wane in the 
Balkans. Kosovo continues to experience setbacks in its efforts 
to make meaningful, long-lasting reform. The rule of law 
continues to be a very fragile concept and Kosovo continues to 
be a haven for drug-smuggling, human trafficking, and money-
laundering. With Kosovo experiencing such problems and the 
matter of its final status still unclear, the international 
community has very good reason to remain engaged.
    Another area of great concern that I know will be touched 
upon by our witnesses is the assassination of the Serbian Prime 
Minister in March of 2003. He was murdered by organized crime 
that had links to the security forces of the government, and 
while the government has taken great steps to arrest and 
prosecute those who are responsible, the link to the Serbian 
security and intelligence services highlights the need to 
remain involved in assisting Serbia in developing a government 
free of corruption and free of connections to organized crime.
    I think the challenges that are facing the Baltic States 
can be overcome. The United States, in my view, must remain 
engaged and offer what advice and assistance we can to foster 
transparent democracies that recognize the inherent rights of 
all citizens as well as promote the free market concepts that 
give all citizens the opportunity to succeed and prosper.
    My colleague, Senator George Voinovich of Ohio, over the 
years has just been a stalwart leader on these issues. He has 
dedicated a great deal of time and energy in making sure and 
ensuring that the United States has the proper focus and 
understanding on the policies and actions we might take in the 
Balkan States, and I appreciate all of Senator Voinovich's 
tremendous leadership and the work that his staff has done as 
well in organizing this hearing.
    I will have to leave shortly for a meeting that I have over 
back at the Capitol, and Senator Biden is on his way and I'm 
sure will have opening remarks, but I thank all of our 
witnesses. But in particular I thank Senator Voinovich for his 
principled leadership, steady leadership and being our 
conscience and our guiding light in the United States effort to 
assist our friends in the Balkans.
    So with that, I'm going to turn the gavel over to Senator 
Voinovich until I can return, or for the remainder of the 
meeting, and with that, Senator Voinovich, please preside, and 
thank you all.
    Senator Voinovich [presiding]. Thank you, Senator Allen. I 
want to express my appreciation to you for allowing us to 
schedule this very important hearing on Southeast Europe. I 
wasn't aware of the fact that you had visited Bosnia in 1997, 
and we've never discussed it, but the first person that was 
killed in Bosnia was an Ohioan who stepped on a land mine. That 
is how he was killed, and I am grateful that you continue to be 
interested in this part of the world, because it is an area 
where we have invested an enormous amount of time and effort 
and money, and we've got to make sure that what we have 
accomplished is not unraveled, because we have enough other 
fish to fry all over the world, so thanks again for allowing us 
to have this hearing.
    Senator Allen. Thank you, Mr. Chairman.
    Senator Voinovich. I would like to welcome two 
distinguished panels of witnesses today who have agreed to 
testify before the subcommittee. We're first going to hear from 
Deputy Assistant Secretary of State Paul Jones, who is acting 
in his position following the departure of Janet Bogue, who 
recently left to become someone who is going to work with young 
Foreign Service officers at the Department, which I think is a 
very important responsibility. She will be missed. I am very, 
very grateful for the good job that she did and the 
relationship that I built with her, but we welcome you, Mr. 
Jones, and you have also served as Director of the office of 
South Central Europe at the State Department.
    Our second panel includes Daniel Serwer, who I've known a 
long time, who serves as the director of the Balkans Initiative 
and Peace Operations at the U.S. Institute of Peace, Mr. James 
O'Brien of The Albright Group, and Major General William L. 
Nash, U.S. Army, retired, who serves as the John W. Vessey 
Senior Fellow and director of the Center for Preventive Action 
at the Council on Foreign Relations.
    I thank all of you for coming here and taking time to be 
with us. I believe it's imperative that we continue to talk 
about developments in this part of the world, and I look 
forward to your testimony.
    While I welcome the witnesses today, I will tell you that 
I'm very frustrated and disappointed that the Department of 
Defense has chosen not to appear before the subcommittee this 
afternoon to respond to questions regarding U.S. engagement in 
the Balkans. I find it troubling that the Defense Department is 
unwilling to engage with the Foreign Relations Committee at 
this time, when thousands of American troops are on the ground 
in Bosnia and in Kosovo, and U.S. taxpayer dollars are invested 
to promote peace and stability in that region. I am hopeful 
that they will soon be prepared to address questions that I and 
other members of the committee would like to raise regarding 
our military operations in Southeast Europe.
    I must also say, as kind of an editorial comment, that I 
and many of my colleagues are very frustrated that we can't get 
more information about Iraq today. We need to know how many 
troops we're going to have in Iraq. We need to know how long 
they're going to be there, and we have to have some idea of how 
much it's going to cost, and I'm hoping that Secretary Rumsfeld 
finds time before the end of this week to come and address the 
Members of the U.S. Senate and bring us up to date on that, 
because many of us, when we go home, are going to be asked 
questions by our constituents about our involvement in Iraq, 
and I think it's our obligation to be able to respond to those 
questions in an intelligent fashion.
    While it is clear that the President and his team have a 
lot on their plate with regard to our foreign policy agenda, 
including Iraq, North Korea, Afghanistan, and the Middle East, 
I believe that it is crucial that we continue to pay attention 
to what's happening in Southeast Europe. We have invested 
considerable resources in the Balkans during the last decade, 
and continued engagement is critical as we look to fulfill our 
objectives there.
    When I came to the Senate in January 1999, the U.S. Senate 
was engaged in a debate about U.S. involvement in the Kosovo 
crisis, and I got very much involved in that whole debate. Four 
years later, the international community remains engaged in 
Kosovo, with the U.N. mission in Kosovo charged with the 
administration of the day-to-day affairs in the province, and a 
total of roughly 24,000 troops on the ground as part of NATO's 
Kosovo force, KFOR, of which 2,600 are Americans. These troops, 
including a significant American presence, remain critical to 
the preservation of peace in Kosovo.
    The international community also maintains an active 
presence in Bosnia and Herzegovina, with the Office of the High 
Representative and NATO's stabilization force, which is into 
its eighth year--eighth year--with troops on the ground. At 
present, approximately 12,000 soldiers, including 1,900 
Americans, serve as part of SFOR. As reaffirmed by NATO foreign 
ministers at their meeting in Madrid earlier this month, NATO 
still has a job to do in Bosnia, including the apprehension of 
war criminals and initiatives to fight terrorism and organized 
crime.
    Without a doubt, the political environment in Southeast 
Europe has changed during the course of U.S. engagement in the 
region in the past several years, most dramatically altered by 
the death of Franjo Tudjman in Croatia on December 10, 1999 and 
the removal of Slobodan Milosevic from power on October 5, 
2000. However, considerable challenges remain as we move 
forward with our efforts to promote democracy, the rule of law, 
economic reform, and lasting peace in the Balkans.
    As we examine U.S. policy toward Southeast Europe, 
particularly the successor states of the former Yugoslavia, I 
believe it is essential to address the future of U.S. 
involvement in NATO peacekeeping missions in Bosnia and 
Herzegovina and Kosovo. Following the ethnic conflict of the 
nineties, NATO has been an essential part of efforts to secure 
security and stability in the Balkans, first in Bosnia and 
Herzegovina and then later in Kosovo, and most recently in 
Macedonia. While the NATO mission in Macedonia has been turned 
over to the European Union, the alliance continues to play a 
significant role in Bosnia and Kosovo.
    The importance of NATO's presence, including a significant 
American contingency, is underscored time and time again in my 
conversations with individuals engaged in the region. When I 
visited U.S. soldiers stationed in Tuzla, Bosnia in December 
2001, I asked a young American what would happen if the NATO 
forces left. His response to me was, ``they'll start killing 
each other,'' and it's very interesting, it was the same 
question that my wife asked on the mission that she went on, 
the same answer, they'll start killing each other.
    The same commitment is important in Kosovo. While the U.N. 
mission in Kosovo, led by Michael Steiner, established a set of 
benchmark goals last spring which call for progress in key 
reform areas, including the need to improve respect for 
minority rights and refugee returns, the fact remains that 
security conditions in Kosovo are not conducive to large-scale 
returns, and only a small fraction of the non-Albanian refugees 
who fled after the war have been able to return to their homes. 
Until security has improved for all people in Kosovo, including 
minority groups, I believe it's essential that NATO forces, 
including U.S. troops, remain deployed in Kosovo.
    Additionally, as I indicated to ethnic Albanian leaders 
during a visit to Kosovo in February 2000 and again in May of 
2002, when I met with Prime Minister Rexhepi and President 
Rugova, I believe it will be difficult to truly address the 
future of Kosovo until the rights of Kosovo ethnic minorities, 
including Serbs, Roma, Egyptians, Bosniaks, Croats, Turks, and 
others are protected, and all enjoy freedom of movement.
    So although the United States faces challenges in other 
parts of the world, including new demands in Iraq, Afghanistan, 
and God only knows where else, we must carefully consider the 
potential ramifications of premature disengagement from the 
Balkans. While it's our sincere hope that successor states of 
the former Yugoslavia continue down the path toward integration 
into the broader European community, we must be realistic in 
our assessment of progress in Bosnia and Herzegovina and Kosovo 
and not rush to pull U.S. troops from the region.
    As we discuss U.S. engagement in the Balkans, it's also 
imperative that we pay close attention to developments in 
Serbia and Montenegro. We find ourselves at the crossroads in 
Belgrade, where the government of Prime Minister Zivkovic has 
undertaken an aggressive effort to combat organized crime and 
corruption after the assassination of Prime Minister Zoran 
Djindjic.
    Though tragic, the assassination of Prime Minister Djindjic 
has made clear the link between organized crime and the 
Milosevic-era thugs who bear in part a large responsibility for 
the atrocities of the nineties. It is this group of people who 
serve as an impediment to reform and the country's future in 
Europe's democratic institutions. While those behind the 
Djindjic assassination hoped the government would fall in the 
absence of a clear authority, the government pulled through, 
and the reformers prevailed. In the months following the 
assassination, thousands who were tied to organized crime have 
been arrested, and the government appears to be headed down a 
path of reform.
    While these are positive developments, it remains unclear 
how long the reforms will continue and just how deep they will 
go. As Serbian and Montenegro looks toward membership in NATO 
and the European Union, including hopes for admittance into 
NATO's Partnership for Peace program, it is imperative that the 
United States remain engaged and continue to call for reforms, 
including cooperation with International Criminal Tribunal for 
the former Yugoslavia and reform of the country's defense 
sector.
    A month or so ago I met with Carla del Ponte,, and she made 
it very clear that there is a lot more cooperation that she 
could be getting from Croatia and from Serbia, terms of The 
Hague.
    Additionally, the United States should continue to monitor 
developments in Croatia and Macedonia. In Croatia, President 
Mesic and Prime Minister Racan have moved forward with reform 
efforts since coming to power in 2000. While the situation has 
improved since the death of Tudjman, there are still challenges 
that must be addressed. This includes cooperation with the war 
crimes criminal tribunal, as I mentioned, as well as refugee 
returns.
    Additionally, as the country faces continued economic 
difficulties, there could be increased support for 
nationalistic parties in parliamentary elections scheduled to 
take place later in the year. This could be a setback in 
efforts to promote democratic reforms in Croatia.
    In Macedonia, the United States should continue to call for 
the full implementation of the Ohrid Framework Agreement which 
was signed by Macedonia and the ethnic Albanian political 
parties in 2001. While there has been progress to date in 
efforts to move forward with the implementation of the peace 
agreement, ethnic tension remains high in Macedonia. A stable, 
multi-ethnic Macedonia is important to the overall security in 
the region.
    These are but a sampling of issues that impact our 
engagement in the Balkans. We are pleased to have the 
opportunity to discuss them here today, and I again thank the 
chairman and ranking member for agreeing to schedule this 
important hearing. While our focus has necessarily shifted a 
bit in the Halls of Congress since I came to Washington in 
1999, as we address the ongoing campaign against terrorism and 
the developments in the Middle East, I continue to believe that 
our engagement in Southeast Europe is necessary.
    [The prepared statement of Senator Voinovich follows:]

           Prepared Statement of Senator George V. Voinovich

    I would like to thank Senator Lugar and the Chairman of the 
Subcommittee on European Affairs, Senator Allen, for agreeing to 
schedule this hearing today to examine ongoing challenges in the 
Balkans.
    I would also like to welcome two distinguished panels of witnesses 
who have agreed to testify before the subcommittee this afternoon. We 
will first hear from Deputy Assistant Secretary of State Paul Jones, 
who is acting in this position following the departure of Ms. Janet 
Bogue, who recently left her position in the European Affairs Bureau to 
assume a position working with young Foreign Service Officers at the 
Department. While she will be missed, we welcome Mr. Jones, who has 
also served as the Director of the Office of South Central Europe at 
the State Department.
    Our second panel includes Daniel Serwer, who serves as the Director 
of the Balkans Initiative and Peace Operations at the U.S. Institute of 
Peace; Mr. James O'Brien of the Albright Group; and Major General 
William L. Nash USA (Ret.), who serves as the John W. Vessey Senior 
Fellow and Director of the Center for Preventive Action at the Council 
on Foreign Relations.
    Thank you all for taking the time to be here today. I believe it is 
imperative that we continue to talk about developments in this part of 
the world, and I look forward to your testimony.
    While I welcome these witnesses today, I am frustrated and 
disappointed that the Department of Defense has chosen not to appear 
before the subcommittee this afternoon to respond to questions 
regarding U.S. engagement in the Balkans. I find it troubling that the 
Defense Department is unwilling to engage with the Foreign Relations 
Committee at this time, when thousands of American troops are on the 
ground in Bosnia and Kosovo, and U.S. taxpayer dollars are invested to 
promote peace and stability in the region. I am hopeful that they will 
soon be prepared to address questions that I, and other members of the 
committee, would like to raise regarding our military operations in 
southeast Europe.
    While it is clear that the President and his team have a lot on 
their plate with regard to our foreign policy agenda--including Iraq, 
North Korea, Afghanistan and the Middle East--I believe it is crucial 
that we continue to pay attention to what is happening in southeast 
Europe. We have invested considerable resources in the Balkans during 
the last decade, and continued engagement is critical as we look to 
fulfill our objectives there.
    When I came to the Senate in January 1999, the United States Senate 
was engaged in debate about U.S. involvement in the Kosovo crisis. More 
than four years later, the international community remains engaged in 
Kosovo, with the U.N. Mission in Kosovo charged with the administration 
of day to day affairs in the province and a total of roughly 24,000 
troops on the ground as part of NATO's Kosovo Force (KFOR)--of which 
2,600 are Americans. These troops, including a significant American 
presence, remain critical to the preservation of peace in Kosovo.
    The international community also maintains an active presence in 
Bosnia and Herzegovina, with Office of the High Representative (OHR) 
and NATO's Implementation/Stabilization Force (SFOR), which is into its 
eighth year with troops on the ground. At present, approximately 12,000 
soldiers, including 1,900 Americans, serve as part of SFOR. As 
reaffirmed by NATO foreign ministers at their meeting in Madrid earlier 
this month, NATO still has a job to do in Bosnia, including the 
apprehension of war criminals and initiatives to fight terrorism and 
organized crime.
    Without a doubt, the political environment in southeast Europe has 
changed during the course of U.S. engagement in the region in the past 
several years, most dramatically altered by the death of Franjo Tudjman 
in Croatia on December 10, 1999 and the removal of Slobodan Milosevic 
from power on October 5, 2000. However, considerable challenges remain 
as we move forward with our efforts to promote democracy, the rule of 
law, economic reform, and a lasting peace in the Balkans.
    As we examine U.S. policy toward southeast Europe, particularly the 
successor states to the former Yugoslavia, I believe it is essential to 
address the future of U.S. involvement in NATO peacekeeping missions in 
Bosnia and Herzegovina and Kosovo. Following the ethnic conflict of the 
1990s, NATO has been an essential part of efforts to ensure security 
and stability in the Balkans--first in Bosnia and Herzegovina, later in 
Kosovo, and most recently in Macedonia. While the NATO mission in 
Macedonia has been turned over to the European Union, the Alliance 
continues to play a significant role in both Bosnia and Kosovo.
    The importance of NATO's presence, including a significant American 
contingency, is underscored time and time again in my conversations 
with individuals engaged in the region. When I visited U.S. soldiers 
stationed in Tuzla, Bosnia in December 2001, I asked a young American 
what would happen if the NATO forces left. His response to me? 
``They'll kill each other.'' While some progress has been made since 
that time, ethnic tension in Bosnia and Herzegovina remains high.
    The same is especially true in Kosovo. While the U.N. Mission in 
Kosovo, led by Michael Steiner, established a set of benchmark goals 
last spring, which call for progress in key reform areas, including the 
need to improve respect for minority rights and refugee return, the 
fact remains that security conditions in Kosovo are not conducive to 
large-scale return, and only a small fraction of the non-Albanian 
refugees who fled after the war have been able to return to their 
homes. Until security has improved for all people in Kosovo, including 
its minority groups, I believe it is essential that NATO forces--
including U.S. troops--remain deployed in Kosovo.
    Additionally, as I indicated to ethnic Albanian leaders during a 
visit to Kosovo in February 2000 and again in May 2002, I believe it 
will be difficult to truly address the future of Kosovo until the 
rights of Kosovo's ethnic minorities, including Serbs, Roma, Egyptians, 
Bosniaks, Croats, Turks and others, are protected, and all enjoy 
freedom of movement.
    Though the United States faces challenges in other parts of the 
world, including new demands in Iraq and Afghanistan, we must carefully 
consider the potential ramifications of premature disengagement from 
the Balkans. While it is our sincere hope that the successor states to 
the former Yugoslavia continue down the path toward integration into 
the broader European community, we must be realistic in our assessment 
of progress in Bosnia and Herzegovina and Kosovo and not rush to pull 
U.S. troops from the region.
    As we discuss U.S. engagement in the Balkans, it is also imperative 
that we pay close attention to developments in Serbia and Montenegro. 
We find ourselves at a crossroads in Belgrade, where the government of 
Prime Minister Zoran Zivkovic has undertaken an aggressive effort to 
combat organized crime and corruption in the aftermath of the 
assassination of Prime Minister Zoran Djindjic on March 12, 2003.
    Though tragic, the assassination of Prime Minister Djindjic has 
made clear the link between organized crime and the Milosevic-era thugs 
who bear in part a large responsibility for the atrocities of the 
1990s. It is this group of people who serve as an impediment to reform 
and the country's future in Europe's democratic institutions.
    While those behind the Djindjic assassination hoped that the 
government would fall in the absence of a clear authority, the 
government pulled through, and the reformers prevailed. In the months 
following the assassination, thousands with ties to organized crime 
have been arrested, and the government appears to be headed down a path 
of reform. While these are positive developments, it remains unclear 
how long the reforms will continue, and just how deep they will go.
    As Serbia and Montenegro looks toward membership in NATO and the 
European Union, including hopes for admittance into NATO's Partnership 
for Peace (PfP) program next year, it is imperative that the United 
States remain engaged and continue to call for reforms--including 
cooperation with the International Criminal Tribunal for the Former 
Yugoslavia (ICTY) and reform of the country's defense sector.
    Additionally, the United States should continue to monitor 
developments in Croatia and Macedonia. In Croatia, President Mesic and 
Prime Minister Racan have moved forward with reform efforts since 
coming to power in 2000. While the situation has improved since the 
death of Tudjman, there are still challenges that must be addressed. 
This includes cooperation with the War Crimes Tribunal, as well as 
refugee return. Additionally, as the country faces continued economic 
difficulties, there could be increased support for nationalist parties 
in parliamentary elections scheduled to take place later this year or 
early next year. This could be a setback in efforts to promote 
democratic reforms in Croatia.
    In Macedonia, the United States should continue to call for the 
full implementation of the Ohrid Framework Agreement, which was signed 
by Macedonian and ethnic Albanian political parties in 2001. While 
there has been progress to date in efforts to move forward with the 
implementation of the peace agreement, ethnic tension remains high in 
Macedonia. A stable, multi-ethnic Macedonia is important to overall 
security in the region.
    These are but a sampling of the issues that impact our engagement 
in the Balkans. I am pleased to have the opportunity to discuss them 
here today, and I again thank the Chairman and the Ranking Member for 
agreeing to schedule this important hearing. While our focus has 
necessarily shifted a bit in the halls of Congress since I came to 
Washington in January 1999, as we address the ongoing campaign against 
terrorism and developments in the Middle East, I continue to believe 
that our engagement in southeast Europe is necessary.
    I would again like to thank our witnesses for being here today. We 
will begin with Deputy Assistant Secretary of State Paul Jones.
    Thank you.

    Senator Voinovich. Again, I'd like to thank the witnesses 
for being here today, and I will begin the testimony with 
Deputy Assistant Secretary Paul Jones. Thank you for coming.

 STATEMENT OF PAUL W. JONES, ACTING DEPUTY ASSISTANT SECRETARY 
  OF STATE FOR EUROPE AND EURASIA, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Jones. Thank you for inviting me to testify before your 
subcommittee today. I am pleased to have this opportunity to 
share with you some transformations that are taking place today 
in four of the successor states to the former Yugoslavia: 
Serbia and Montenegro, Croatia, the former Yugoslav Republic of 
Macedonia and Bosnia and Herzegovina.
    These four countries and the U.N-administered Kosovo have 
come a long way over the past 2 years. The region is now 
dominated by reform-oriented governments that wish to join 
Euro-Atlantic institutions. U.S. policy is designed to 
accelerate democratic, market-oriented reforms and to help 
facilitate the region's integration into NATO and the EU 
because we believe this is critical to fulfilling the 
President's vision of a Europe, whole, free, and at peace.
    This new dynamic is playing out in several ways. Under the 
Adriatic Charter signed by Secretary Powell, Macedonia, 
Croatia, and Albania have agreed to cooperate on common goals 
and to support each other's NATO candidacies. Serbia and 
Montenegro and Bosnia and Herzegovina seek to join the 
Partnership for Peace. These desires are fueling impressive 
progress on civilian control of reformed militaries as well as 
regional cooperation.
    The four successor states are also beginning to support 
U.S. goals outside the region. Macedonian forces are deployed 
in Iraq and Afghanistan; Croatian forces are deployed in 
Afghanistan.
    While this region is in many ways a success story, 
significant challenges remain. What most holds back the region 
is organized crime and corruption, post-conflict issues and 
economies burdened by the remnants of communism. The United 
States plays a leading role in confronting all of these 
challenges politically and through our assistance programs, 
working closely with our European partners. We insist that all 
states comply with their international obligation to cooperate 
with the international criminal tribunal for the former 
Yugoslavia.
    We lead efforts to ensure that every displaced person or 
refugee has the right to return to his home. Our participation 
in NATO's military missions is critical to maintaining safe and 
secure environments in Bosnia and Herzegovina and Kosovo. 
Approximately 1,800 U.S. soldiers are currently serving in SFOR 
in Bosnia and Herzegovina, and 2,250 in KFOR in Kosovo.
    Let me be a bit more specific. On March 12, 2003, Serbian 
Prime Minister Zoran Djindjic was assassinated in front of the 
Serbian Government building by the deputy commander of the 
infamous paramilitary unit known as the Red Berets. Rather than 
crumble, the Serbian Government came together, picked a 
successor, imposed a state of emergency, and began a far-
reaching crackdown on organized crime and initiated sweeping 
defense reforms.
    The assassination reinvigorated the stalled reform process 
in Serbia and revealed a nexus between organized crime, war 
criminals, and their supporters. Secretary Powell visited 
Belgrade April 2 to offer his condolences and lend his personal 
support to the reform agenda emerging out of this tragedy.
    During this crackdown on organized crime and startup of 
defense reforms, Belgrade took significant steps in cooperation 
with the international tribunal. Authorities apprehended the 
two notorious indictees still at large for crimes committed in 
Vukovar. One has been transferred to the tribunal, and the 
other is expected to follow in the coming days.
    In addition, former Serbian State Security Chief Stanisic, 
an architect of the Serbian policy of ethnic cleansing, and his 
deputy, Simatovic, founder of the Red Berets, were apprehended 
and transferred to The Hague.
    In this context, Secretary Powell decided on June 15 to 
certify that Serbia, pursuant to section 578 of the Foreign 
Operations and Appropriations Act, was cooperating with the 
tribunal. This certification does not mean that Belgrade is in 
full cooperation with the tribunal. We remain committed to 
ensuring that all indictees are apprehended and transferred, 
and that necessary access to witnesses and documents is 
assured.
    Serbia and Montenegro have formally written to NATO 
requesting an invitation to join the Partnership for Peace. 
Belgrade is aware that two outstanding issues must first be 
resolved: full cooperation with the tribunal, including 
regarding Ratko Mladic; and dropping suits against eight of our 
NATO allies before the International Court of Justice. Once 
these issues are resolved, we will welcome Serbia and 
Montenegro into the Partnership for Peace.
    Four years since the end of the Kosovo conflict, Kosovo has 
steadily emerged from the devastation of war to become a more 
stable and democratic society. Security has improved, with a 
steady decline in most major crime categories, including inter 
ethnic violence. The Kosovo Police Service is assuming most 
police functions, and is quickly approaching its full capacity, 
while the number of U.N. international civilian police is 
dropping. Approximately 10 percent of the Kosovo Police Service 
are ethnic-Serbs, a composition well-received by all.
    Freedom of movement for minorities is constrained in some 
areas while improved in others. The return of refugees and 
displaced persons, while slow, is steadily increasing. U.S. 
assistance has played a significant role in each of these 
areas.
    We support the approach of U.N. Special Representative 
Michael Steiner, who laid out in April 2002 eight standards 
that should be achieved before the question of Kosovo's final 
status is addressed. This approach is called standards before 
status. We believe that it is premature to discuss final 
status. There are those in Kosovo who seek independence and 
those in Serbia who seek partition. We believe that moving in 
either direction could risk destabilizing Kosovo and the 
broader region, which has only now emerged from a decade of 
conflict.
    The standards laid out by Special Representative Steiner 
address many of the issues that at present are sources of 
political volatility and potential instability, like the right 
of people to return, unemployment, and lack of functioning 
institutions of local government. Achieving these standards 
will ensure that final status for Kosovo will help stabilize 
the region.
    Croatia has been a good partner in the war on terrorism. 
Regrettably, its rather vocal divergent positions on Iraq and 
the International Criminal Court have strained our relations. 
We want Croatia to fulfill its commitments on facilitating 
refugee returns, property restitution, and housing 
reconstruction and tenancy rights, the implementation of which 
has been repeatedly delayed. We also insist that Croatia 
cooperate fully with the tribunal and follow through on its 
commitments to provide documents, arrest and transfer indicted 
war criminal General Gotovina.
    In Macedonia, free, fair, and peaceful elections last fall 
ushered in a new multiethnic coalition government with a 
forward-looking reformist agenda. Completing implementation of 
the Framework Agreement that ended the 2001 insurgency is the 
new government's highest priority. As Framework Agreement 
implementation proceeds, public confidence in Macedonia's 
political institutions is deepening, lending increased 
stability to the country. At the same time, the government has 
set a priority on accelerating preparations for NATO and EU 
membership.
    Nearly 8 years after the 1992-1995 war, Bosnia and 
Herzegovina has only recently reached a stage where it should 
have been in 1992: in transition from a Communist command 
economy to a democratic, pluralistic market economy state. 
There is now increasing recognition in both Republika Srpska 
and the Federation that development of sustainable state-level 
institutions is necessary to achieve their common goal of Euro-
Atlantic integration.
    In conclusion, I'd like to say that more than a decade 
after the start of the Balkan wars of the 1990s, reformist 
leaders throughout the region are trying to walk the difficult, 
painful path away from the legacies of communism and war and 
into Euro-Atlantic institutions. Our interest lies in helping 
ensure their path is clear and to support their journey in 
every way we can.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Jones follows:]

Prepared Statement of Paul W. Jones, Acting Deputy Assistant Secretary 
          of State for Europe and Eurasia, Department of State

    Thank you for inviting me to testify before your Committee today, 
Mr. Chairman. I am particularly pleased to have this opportunity to 
share with you some of the transformations that are taking place in 
four of the successor states to the former Yugoslavia today--Serbia and 
Montenegro, Croatia, the Former Yugoslav Republic of Macedonia and 
Bosnia and Herzegovina--to share with you how far we have come, to 
underscore our continued commitment to this critical region, and to 
outline the challenges we still face.
    These four countries, and the UN-administered Kosovo, have come a 
long way over the past two years. Last autumn, a series of elections 
indicated significant progress in the conduct of free elections, 
building democratic societies and public support for reforms. Where a 
decade ago there were bitter divisions among countries in this region, 
today they are working together on common goals. Just a few weeks ago, 
all regional foreign ministers met in Sarajevo under the umbrella of 
the Southeast Europe Cooperation Process (SEECP) where they agreed to 
work together on key challenges facing the region including trade, 
energy and the fight against organized crime. And these four countries 
are expanding their horizons to work with the United States outside the 
region, in Iraq and Afghanistan.
    The region is now dominated by reform-oriented governments. Our 
intensive work, bilaterally, regionally and through multilateral 
institutions, is designed to accelerate the range of democratic and 
market-oriented reforms. Our efforts are specifically targeted to help 
facilitate the region's integration into the EU and NATO because we 
believe this is critical to fulfilling the President's vision of a 
Europe whole, free and at peace. All of the successors to Yugoslavia 
share this goal and have made further integration a national priority. 
Together, we are helping them achieve these common goals.
    American assistance--totaling $960 million in FY 02--plays a 
critical role in this process, providing an incentive and helping to 
create an environment and the infrastructure necessary to move forward 
with the reform and integration process. Counterterrorism, 
nonproliferation, promoting rule of law and attacking corruption are 
global concerns, and remain our highest priorities for our assistance 
programs in the region. This includes programs to enhance capabilities 
to prevent, deter and detect proliferation of weapons, stop trafficking 
in persons and drug trafficking and counter transnational crime. We 
have also sought funding to support regional stability and security 
concerns through our Foreign Military Financing, International Military 
Education and Training and Peacekeeping Operations funds.
    Our investment is paying off. Democratic institutions are taking 
root, stability is growing and global threats to our interests are 
being addressed. Our commitment is also yielding another large dividend 
in the form of new enhanced partnerships. Macedonia and Croatia 
provided political and material support for the War on Terrorism, 
including the stabilization of Afghanistan and rebuilding the Afghan 
National Army. Together with their other Vilnius-10 colleagues Albania 
and Macedonia provided early political support for disarming Saddam 
Hussein as we prepared for possible military operations in Iraq. When 
military action became necessary, Albania rapidly committed combat 
forces, joining our troops on the ground in Iraq. Macedonia deployed 
units to Iraq to assist our stabilization efforts. Bosnia and 
Herzegovina has expressed an interest in looking for ways it might 
contribute. We have found a common enemy in the Global War on Terrorism 
and a common goal in our commitment to protect freedom and democracy 
around the globe. These relationships will continue to grow and deepen 
as these countries are further integrated into our common security 
structures.
    Bulgaria's accession to NATO has given hope to Croatia, Albania and 
Macedonia. Under the Adriatic Charter, signed by Secretary Powell, 
these countries agreed to cooperate on common goals and to support each 
other's NATO candidacies. Serbia and Montenegro and Bosnia and 
Herzegovina seek to join the Partnership for Peace as quickly as 
possible. Their desire is fueling impressive progress on civilian 
control of reformed militaries, as well as regional cooperation. We 
support them in their goals, while recognizing that important work 
remains before they can be realized.
    NATO's military missions are critical to maintaining safe and 
secure environments in Bosnia and Herzegovina and Kosovo. Approximately 
1800 U.S. soldiers are currently serving in SFOR in Bosnia and 
Herzegovina, and 2250 in KFOR in Kosovo. We remain committed to these 
NATO missions. We went in together with our Allies, and we will leave 
together, but we seek to hasten the day when peace in the region is 
self-sustaining and our troops can be withdrawn. We are pleased that a 
framework for cooperation between NATO and the EU (the so-called 
``Berlin-plus'' arrangements) was concluded earlier this year. The EU 
has since assumed responsibility for the international security 
presence in Macedonia, an operation now known as Concordia. NATO has 
been working closely with the EU to help make Concordia a success. 
While the EU has expressed a desire to assume the SFOR mission in 
Bosnia, we believe that the time is not yet right to consider this. 
There are certain tasks for which NATO is uniquely qualified, 
particularly disruption of terrorist networks and apprehension of 
persons indicted for war crimes, both of which continue to threaten 
stability in Bosnia and Herzegovina.
    We are pleased that the EU and our European partners are playing a 
more active role in the region. A basic ingredient of today's successes 
is greatly improved coordination and complementary work between the 
United States, EU, NATO, OSCE and other international organizations 
active in the region. The United States will continue to play a key 
role in this partnership. The United States and the EU coordinate our 
political messages on support for democratic governments, conflict 
resolution, cooperation with the International Criminal Tribunal for 
the former Yugoslavia, and the return of refugees and displaced 
persons. The United States and EU consult on the direction of our 
assistance strategies on economic reform and co-finance law enforcement 
programs throughout the region.
    While this region is in many ways a success story, significant 
challenges remain. What most holds the region back is organized crime 
and corruption, post-conflict issues and weak economies burdened by the 
remnants of communist-style central planning and a top-down method of 
governing. Groups that traffic in persons, drugs and weapons are well 
entrenched in the region and quite powerful. Such groups pose a threat 
to these young democracies, and we provide extensive programs and 
political support to develop capacity to fight them. Part of moving 
away from a post-conflict environment toward long-term reconciliation 
and stability involves the painful process of coming to terms with the 
past decade of war and bloodshed. This includes the international 
obligation to cooperate with the International Criminal Tribunal for 
the former Yugoslavia (ICTY). We are also working to help build 
countries' capacities to prosecute domestically war crimes cases that 
will not be tried by the ICTY. Another critical element of 
reconciliation and a fundamental American value is the right of every 
displaced person or refugee to return to his home. We work hard to make 
this a reality throughout the region.
    Decades of communism followed by a decade of conflict had a serious 
debilitating effect on the economies of the region. Reform efforts are 
just now beginning to bear fruit, but economic growth and job creation 
have not yet taken off. As evidence that reforms are taking hold, the 
major multilateral development banks are now operating throughout the 
region, all countries are either members of the WTO or have begun 
accession negotiations, and cross-border trade flows are picking up. 
The IMF and World Bank are also active in the region and play a crucial 
role in reinforcing these reforms. However, we must continue to push 
for further reform to confront the many problems still facing the 
region, including chronically high unemployment, low levels of foreign 
investment, and pervasive corruption. With these problems in mind, we 
have worked with the countries of the region to help rebuild shattered 
intra-regional economic relationships and to create a market-based, 
investment-friendly economic climate in each country.
    Bilaterally, we have used a substantial portion of our assistance 
resources to foster economic reform efforts, notably regulatory, 
banking, and tax reform, and to promote private sector development. 
Regionally, we have been a driving force behind the successful effort 
to create a network of bilateral free trade agreements and to begin 
building a regional energy market, working UN-administered Kosovo into 
these regional arrangements as possible.

                         SERBIA AND MONTENEGRO

    On March 12, 2003, Serbian Prime Minister Zoran Djindjic was 
assassinated in front of the Serbian Government building by sniper 
Zvezdan Jovanovic, Deputy Commander of the infamous paramilitary unit 
known as the Red Berets. Rather than crumble, the Serbian Government 
came together, picked Zoran Zivkovic as Djindjic's successor, imposed a 
State of Emergency and began a far-reaching crackdown on organized 
crime and instituted sweeping defense reforms. The assassination 
reinvigorated the stalled reform process in Serbia and revealed the 
nexus between organized crime and war crimes indictees and their 
supporters. Secretary Powell visited Belgrade April 2 to offer his 
condolences and lend his personal support to the reform agenda emerging 
out of this tragedy.
    The crackdown on organized crime resulted in the arrest of more 
than 4500 people and effectively dismantled Serbia's largest organized 
crime syndicates, most notably the Zemun clan whose leaders were behind 
the Djindjic assassination. The Red Berets, a paramilitary police 
organization with a history of war crimes and closely linked to the 
Zemun clan, was peacefully disbanded by the Serbian Government and many 
of its top leaders were arrested. Defense Minister Tadic began his 
military house-cleaning by pledging full cooperation with the ICTY, 
dismissing Milosevic-era general Tomic and more than a dozen other 
senior officers, disbanding the ``Military Commission on Cooperation 
with the Hague'' which, despite its name, obstructed cooperation with 
the Tribunal, and issuing an order obligating all army personnel to 
apprehend or report any information on indicted war criminals. Finally, 
Tadic initiated a program of defense and security reform, subordinating 
the military to civilian control for the first time in fifty years. 
Implementation of these policies is essential. On May 6, President Bush 
determined that initiating a bilateral military relationship with 
Serbia and Montenegro was in the U.S. national interest. We are working 
now to begin an International Military and Education Program to support 
this defense reform agenda.
    During this crackdown on organized crime and start up of defense 
reforms, Belgrade took significant steps on cooperation with the ICTY. 
Following the assassination of Prime Minister Djindjic, authorities 
apprehended the remaining ``Vukovar Three'' indictees, Miroslav Radic 
and Veselin Sljivancanin. Radic has been transferred to the ICTY and 
Sljivancanin is expected to follow in the coming days. In addition, 
Serbian State Security Chief Jovica Stanisic, architect of the Serbian 
nationalist policy of ethnic cleansing, and his deputy Franko 
Simatovic, founder of the Red Berets, were apprehended and transferred 
to The Hague.
    In this context, the Secretary decided on June 15 to certify that 
Serbia, pursuant to Section 578 of the Foreign Operations and 
Appropriations Act, was cooperating with ICTY, taking steps to end 
support for the Republika Srpska, and implementing policies that 
reflect a respect for minority rights and the rule of law. This 
certification does not mean that Belgrade is yet in full cooperation 
with the ICTY. The United States and our European partners remain 
committed to ensuring that Ratko Mladic and the other outstanding 
indictees are apprehended and transferred to the ICTY, and that 
appropriate access to witnesses and documents by the ICTY is assured.
    On June 19, Serbia and Montenegro formally requested an invitation 
to join the Partnership for Peace in a letter to NATO Secretary General 
Robertson. Belgrade is aware that two outstanding issues must be 
resolved before it can be invited into Partnership for Peace: full 
cooperation with the ICTY, including regarding Ratko Mladic; and, 
Belgrade's suits against eight of our NATO Allies before the 
International Court of Justice. Once these issues are resolved, the 
United States will welcome Serbia and Montenegro into the Partnership 
for Peace.
    While defense reforms have recently been in the spotlight, the 
United States is also heavily engaged in support of economic 
prosperity, integration and reform in Serbia and Montenegro. We seek to 
fully normalize our economic relations and strongly support the 
provision in the Miscellaneous Tariff Bill that would allow Normal 
Trade Relations to be established between our countries. In May, the 
President determined that the strong commitment to political and 
economic reform shown by senior officials in the Government of Serbia 
and Montenegro warranted removal of the last vestiges of sanctions 
imposed during the Milosevic era. Earlier this year we also unblocked 
and returned to the successor states of the former Yugoslavia hundreds 
of millions of dollars in assets frozen during the Milosevic-era.

                                 KOSOVO

    Four years since the end of the Kosovo conflict, Kosovo has 
steadily emerged from the devastation of war to become a more stable 
and democratic society. Security has improved, with a steady decline in 
most major crime categories, including inter-ethnic violence, since 
June 1999. The Kosovo Police Service is assuming most police functions 
and is quickly approaching its full capacity of 6,500 personnel, while 
the number of UN international civilian police is dropping. 
Approximately ten percent of the Kosovo Police Service's officers and 
rank-and-file are ethnic Serbs, a composition well received by the 
force and the communities it patrols. U.S. assistance has played a 
significant role in this success, through contributions to training the 
Kosovo Police Service and through the American civilian police 
contingent in the UN police force.
    As military threats have decreased, unfortunately, there is less 
progress in establishing the rule of law where there is a need to train 
more lawyers and judges to further increase local capacity. Ethnic 
relations are improving slowly but unevenly. There are several 
municipalities in Kosovo with Serbian majority councils or significant 
Serbian participation. Tensions remain in some areas, however, and 
there is still violence against Serbs and Serbian property. Freedom of 
movement for minorities is constrained in some areas, while markedly 
improved in others; much more can be done on this front. The United 
States, together with our partners, support the right of all refugees 
and displaced persons to return to their homes. We are extending 
intensive political support and lead the way in financial assistance to 
support significant returns this year.
    KFOR's presence remains invaluable to ensuring an overall safe and 
secure environment within which implementation of UN Security Council 
Resolution 1244 can occur. The improvement in the internal security 
situation has allowed for large reductions in KFOR in the past 18 
months. We believe that reductions in KFOR scheduled for this year will 
adequately match the force to the situation on the ground.
    The United States supports the approach of the UN Secretary 
General's Special Representative in Kosovo, Michael Steiner, who laid 
out in April 2002 eight standards that should be achieved before the 
question of final status is addressed. This approach is called 
``standards before status.'' Together with the standards, Special 
Representative Steiner also laid out certain benchmarks that would 
indicate the achievement of each standard, along with some specific 
actions required by local entities. It would be fair to say that there 
has been some progress on each of the eight standards, but that for 
none of them have the benchmarks, nor the actions by local entities, 
been fully achieved. The United States is committed to assist Kosovo 
achieve progress in each of these areas. We are also supporting action 
by the United Nations Mission in Kosovo (UNMIK) to further elaborate 
the benchmarks, and required activities to achieve them, so that the 
way forward in Kosovo is substantially clearer to all. This summer we 
plan to provide to UNMIK an experienced U.S. planner to help it develop 
a detailed workplan for achieving the benchmarks.
    We believe that it is premature to discuss final status. There are 
those in Kosovo who seek independence, and those in Serbia who seek 
partition. We believe that moving toward either could risk 
destabilizing Kosovo and the broader region, which has only now emerged 
from a decade of brutal conflict. The standards laid out by Special 
Representative Steiner address many of the issues that at present are 
sources of political volatility and potential instability--like the 
right of people to return, unemployment, and lack of functioning 
institutions of local government. Final status for Kosovo should help 
stabilize the region. Provided the benchmarks are achieved, this will 
be the case.

                                CROATIA

    Croatia has been a good partner in the war on terrorism such as the 
interdiction by customs officials of an arms shipment to Iraq aboard 
the ship Boka Star. Regrettably, its rather vocally divergent position 
on Iraq and Article 98, its refusal to join successor state consensus 
to accept unblocked Yugoslav assets, and its refusal to submit a 
Memorandum of Understanding on Intellectual Property Rights that we 
signed in 1998 to its Parliament for ratification, have strained 
relations. However, we welcome Croatia's recent offer to contribute a 
military police unit to support reconstruction in Iraq. The Department 
and incoming Ambassador Ralph Frank are committed to finding additional 
opportunities for cooperation. We look forward to reciprocal Croatian 
efforts to diminish the current bilateral tensions.
    We want Croatia to fulfill its commitments on facilitating refugee 
returns, property restitution, and housing reconstruction and tenancy 
rights, the implementation of which has been repeatedly delayed. On 
June 12 the government approved measures for providing subsidized 
housing to refugees who had lost their ``tenancy rights'' under the old 
Yugoslav system. This represents an important step in the right 
direction, and we will encourage Croatia to implement these measures 
promptly.
    We also insist that Croatia cooperate fully with ICTY, and follow 
through on its commitments to provide documents, expand efforts to 
locate indicted war criminal Croatian General Ante Gotovina, and be 
responsive to any new indictments. While we support Croatia's NATO and 
EU membership aspirations, it is imperative that we first see greater 
efforts to facilitate refugee returns and cooperate with ICTY.

                               MACEDONIA

    In Macedonia, free, fair and peaceful elections last fall ushered 
in a new multiethnic coalition government with a strong, forward-
looking reformist agenda. Prime Minister Crvenkovski, allied with the 
largest ethnic Albanian party, which includes many former fighters from 
the 2001 insurgency, is focused on normalization, reconciliation, and 
advancing Macedonia on the path of Euro-Atlantic integration. 
Completing implementation of the Framework Agreement that ended the 
2001 insurgency is the new government's highest priority. The United 
States, together with the EU, NATO OSCE and others, is heavily engaged 
in supporting this goal. Macedonia has made substantial progress in 
passing legislation and improving minority representation in state 
structures, with special focus on the security forces. There are 
natural tensions within the governing coalition over the implementation 
of reforms, particularly in the hiring of ethnic minorities. The 
working relationship between the coalition's two largest parties is 
growing, however, as is the relationship between their leaders, Prime 
Minister Crvenkovski and former insurgency leader Ali Ahmeti. As the 
Framework Agreement implementation proceeds, public confidence in 
Macedonia's political institutions is deepening, lending increasing 
stability to the country.
    At the same time, the government has set a priority on accelerating 
preparations for NATO and EU membership. ``Operation Concordia,'' that 
assumed NATO's Amber Fox mission in March, is scheduled to depart in 
September, but the EU has requested of the Government an extension 
until December 1. Macedonia's leadership is eager to demonstrate 
renewed self-sufficiency in the security arena, in the face of the 
continued presence of small numbers of violent extremists who oppose 
reconciliation and seek to destabilize Macedonia and the region. 
Macedonia has made commendable progress toward restoring state control 
throughout the former conflict areas. New multiethnic police units, 
with international training, new policies and new procedures, are 
making inroads against lawlessness--to the welcome of inhabitants who 
do not want to live at the mercy of organized criminal gangs or violent 
extremists. Through ongoing security assistance and police training 
programs, we will continue our work with the government on developing 
capable, modern, democratic security forces that conform to Western 
standards.

                         BOSNIA AND HERZEGOVINA

    Nearly eight years after the 1992-95 war, Bosnia and Herzegovina 
has only recently reached the stage where it should have been in 1992: 
in transition from a communist, command economy to a democratic, 
pluralistic, market economy state. A new currency and banking system 
has brought macro-economic stability and low inflation to Bosnia and 
Herzegovina, and business and municipal leaders are increasingly more 
vocal in pushing government leaders to accelerate reform. However, 
despite government pledges to remove obstacles to foreign and local 
investment, current economic growth is not sufficient to overcome its 
massive trade imbalance, compensate for declining international aid, or 
generate sufficient jobs to sustain the last three years' record level 
of returns by refugees and displaced persons. While Bosnia and 
Herzegovina held its first post-Dayton self-administered elections in 
October 2002, which were deemed free and fair by international 
observers, ethnic politics remain a divisive force at all levels of 
government.
    At the same time, there is increasing recognition in both the 
Republika Srpska and the Federation that development of sustainable 
state-level institutions is necessary to achieve their common goal of 
Euro-Atlantic integration. There has been a dramatic change in the 
entities' attitudes in favor of developing state-level command and 
control of the armed forces to meet NATO's conditions for joining the 
Partnership for Peace, and discussions are underway to create a single 
state-level intelligence service. The multi-ethnic State Border Service 
has made a major dent in illicit trafficking in persons, weapons, and 
commodities, and a new state-level criminal court is trying cases using 
updated criminal codes. Plans are on track for a unified customs 
service and a state-wide value-added tax that will provide sorely-
needed revenue sources to help sustain these new institutions. Bosnia 
and Herzegovina also has been a solid partner in the war on terrorism.
    These changes are astonishing in a country where freedom of 
movement and free elections were problematic only a few years ago. None 
of the changes would be possible without the continued presence of 
international civilian and military missions. The High Representative 
remains the agenda-setting political actor in Bosnia and Herzegovina, 
and still must use his powers to remove obstructionist officials and 
impose laws. The NATO-led Stabilization Force at greatly reduced levels 
continues to ensure a safe and secure environment, to disrupt any 
terrorist groups, and apprehend war criminals.
    Persons indicted for war crimes remain at large, protected by a 
criminal support network whose members permeate the Republika Srpska 
government, military, and intelligence services, and which are 
connected to people involved in the assassination of Serbian Prime 
Minister Djindjic. The assassination has made many leaders in Bosnia 
and Herzegovina realize the threat posed by the symbiotic criminal-war 
criminal partnership. However, many remain intimidated by Radovan 
Karadzic and his thugs. No single act could do more to advance reform 
and justice for Bosnia and Herzegovina than the apprehension of 
Karadzic, which remains a top priority of the U.S. Government.
    SFOR has from the beginning been deeply involved in providing a 
safe and secure environment for the High Representative and Bosnia and 
Herzegovina's elected leaders to do the tough work of reform and 
rebuilding. Refugee returns, functioning police and judicial systems, 
adherence to the rule of law, and economic opportunity are possible 
only because of the security that SFOR has created and maintained.

                               CONCLUSION

    More than a decade after the start of the Balkan wars of the 1990s, 
reformist leaders throughout the region are not playing on grand new 
ideas to benefit one group at another's expense. Instead, these 
reformers are trying to walk the difficult, painful path away from 
Communism and war into Euro-Atlantic institutions. Our interest lies in 
helping ensure the path is clear, and to support their journey in every 
way we can.

    Senator Voinovich. Thank you, Mr. Jones. I've got several 
questions in regard to each of the countries that you've just 
discussed.
    When the NATO foreign ministers met in Madrid at the 
beginning of June, they indicated it was premature to hand over 
the NATO stabilization force, SFOR, to the European Union, 
citing the need to do more to further the apprehension of war 
criminals, as well as efforts to fight terrorism and organized 
crime. They also cited the need to do more to integrate the 
armies of the Republika Srpska and the Bosnian Federation.
    In your view, what role does SFOR play in Bosnia? How would 
a decreased NATO presence in Bosnia affect the overall security 
situation, and do you think that the European Union is prepared 
to assume the military mission in Bosnia?
    Mr. Jones. Thank you. I think the role that SFOR plays in 
Bosnia is primarily to establish and secure a safe and secure 
environment within which the implementation of the Dayton 
Accords can take place, the return of refugees, the 
enhancements of rule of law, and the establishment of state-
level institutions. We think that role is critical.
    The number of NATO troops in SFOR is reviewed every 6 
months in a process at NATO, and most recently in the spring. 
When this review was conducted, and confirmed by the ministers 
in Madrid, the decision was made to maintain the level at 
12,000, since the security situation did not permit reductions 
in that level. We have come down significantly from the 
original level of 60,000, but at this moment in time a pause in 
the reductions was deemed most appropriate in light of 
maintaining a safe and secure environment.
    The European Union expressed its willingness to take over 
the SFOR mission at some point in the future. We believe it's 
premature to discuss that at this moment for some of the 
reasons that you outlined, Mr. Chairman. For one thing, as I 
mentioned, General Jones' and the military recommendation was 
to maintain the level at 12,000 in Bosnia, and the European 
Union was not contemplating a military mission of that 
magnitude.
    There are other specific issues of NATO's role in the 
apprehension of war criminals and counterterrorism that NATO is 
uniquely qualified to pursue, and particularly with the 
participation of the United States, so at this point we believe 
that discussion is not yet ripe to take place.
    Senator Voinovich. I would like to welcome the ranking 
member of the Foreign Relations Committee, Senator Biden. Mr. 
Jones has given his initial testimony, and we are in a period 
of asking him some questions.
    I remain very deeply concerned about organized crime, 
especially in Bosnia, and there has been a discussion about the 
relationship between international civilian personnel in Bosnia 
and the problem of human trafficking. This was mentioned in the 
State Department's annual report on human trafficking, which 
was released on June 5. Can you comment on this situation and 
what's being done to combat the problem, and while you're at 
it, are you able to comment on the overall efforts in Southeast 
Europe to deal with organized crime?
    You have SECI, you have the Stability Pact, you have the 
OSCE. There are many groups over there that are interested in 
organized crime, and the question I've got is, have they got 
their act together? Because they are facing a very formidable 
organized crime effort which is becoming stronger every day, 
every month, and if we are to make sure we don't see some of 
those governments submerge because of it, it seems to me we 
have to make this a very high priority, so if you could comment 
on that, I would appreciate it.
    Mr. Jones. I appreciate the question, Mr. Chairman. I agree 
completely. This is one of the major challenges facing this 
region, organized crime in all its capacities. You spoke 
specifically of Bosnia and specifically of the problem of 
trafficking in persons, which is, as you noted so acutely in 
Bosnia that they are currently listed as a tier 3 country 
because of the extent of the problem, and in our view the 
distance they need to go in fully addressing that problem at 
all levels in Bosnia.
    We are very specifically engaged in Bosnia. We have 
outlined a series of very specific actions they ought to take 
at the state level and at the local level in order to combat 
the specific problem, and preferably over the next 90 days, so 
we could actually move them to a tier 2 status if they took 
those actions.
    To stay on Bosnia just for a moment, we and the Office of 
the High Representative are very actively engaged to try to 
create a state-level law enforcement capacity, which has so far 
been one of the main weaknesses and why organized crime is so 
challenging in Bosnia in particular. The state-level Border 
Service is starting to function, and it is controlling borders 
and access in airports. There is an FBI-like organization 
called the SIPA, the state-level Information Protection Agency, 
which unfortunately has not gotten off the ground, has not 
gotten sufficient funding, but we are pressing very much for 
the Bosnians to take ownership of that as well.
    Overall in the region, as I indicated, the rule of law is a 
major focus of our bilateral assistance efforts and also of 
contributions in various multilateral organizations. I wouldn't 
say that there is a clash of actions among the various 
multilateral organizations. Each is engaged in different levels 
in different aspects of this multifaceted problem, so the 
organization that you mentioned, SECI, the Stability Pact, and 
OSCE, are all engaged in different ways that we find 
complementary.
    Senator Voinovich. I think one of these days we might try 
to have a hearing before the Foreign Relations Committee just 
talking about the issue of organized crime. I have a former 
State patrolman from Ohio that was a policeman in Kosovo and 
now is working for the OSCE, and I get reports every so often. 
It appears things are still not very well organized in terms of 
their effort, too many people with too many spoons in the soup.
    In Kosovo, I met with Mr. Steiner and I was very excited 
about his benchmark goals. It seems to me that not enough has 
been done to implement those benchmark goals. I notice in your 
written testimony that you said the U.S. plans to provide an 
experienced planner to help develop a plan for achieving the 
goals, and I talked to Janet Bogue about this when I got back 
in May 2002, and a long time has elapsed since that visit with 
her, and doing something about moving forward with those goals, 
and I'd like your comment on that.
    And then the other issue is, Mr. Steiner is leaving as the 
Chief Administrator, and what's your opinion on who is going to 
succeed Mr. Steiner. It's been suggested that a man by the name 
of Jacques Klein, an American diplomat who served as former 
Special Representative of the U.N. Secretary General in Bosnia, 
might be someone who would take the job, but from what I 
understand it is the State Department's opinion that they don't 
want an American as the Administrator there in Kosovo, that 
they want a European. So if you could just comment on the 
benchmark goals, where we are, why we have not moved more 
quickly to make progress on them, and then the whole issue of 
who's going to take over, because that's going to have one heck 
of a lot to do with whether or not we achieve those goals.
    Mr. Jones. Well, thank you, Mr. Chairman. We shared your 
enthusiasm for the benchmarks, for the eight standards and the 
limited benchmarks that were announced associated with them by 
Mr. Steiner in April 2002, and we have long advocated that they 
be turned into a much more specific work plan that makes it 
clear what responsibilities each player in Kosovo are and 
preferably over what period of time in order to implement those 
to achieve progress on those benchmarks as quickly as possible.
    We offered our own planner at the U.N. Security Council in 
February of this year, and we are pleased at this point, though 
as you noted it's much later than we would have liked, we are 
pleased that he will be going out to assist with their efforts 
this summer. This is the same person who has been working with 
the U.S. Institute of Peace and worked on the mission 
implementation plan in Bosnia and is very experienced.
    Senator Voinovich. Who is this?
    Mr. Jones. Michael Dzedjic. So while belated, we are 
pleased that effort is underway.
    On the successor to Mr. Steiner, it is our view that this 
is a position that would be best filled by a European, 
preferably from a country that is a member both of the European 
Union and NATO, in order to help Kosovo achieve what many in 
Kosovo would like to achieve, which is a relationship with the 
European Union, and moving toward that structure, ultimately, 
whatever the final status may be, so that's what our position 
has been on that. It's not been decided. Mr. Steiner, as I 
understand it, is planning to leave in early July, but 
Secretary General Kofi Annan has not named a successor yet.
    Senator Voinovich. My only comment on it is that things I 
think could be much better there today. The reports I get back 
in terms of refugee return, little or none, freedom of 
movement, still very difficult, lack of equal service, social 
services to minority groups not taking place, the situation in 
Mitrovica still up in the air, and so forth, and it seems 
somebody has got to get in the saddle over there and start 
making things happen.
    I've got some other questions but I would like to call on 
Senator Biden.
    Senator Biden. Thank you very much, Mr. Chairman. I will 
put my statement in the record, if I may, as if read.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    Thank you, Mr. Chairman, for holding this important hearing. I also 
want to recognize Senator Voinovich for his long interest and 
engagement in the Balkans and his contributions as a valuable partner 
on policy toward this important region.
    Deputy Assistant Secretary Jones, welcome. We appreciate your 
coming here today to update us on the situation in this region since 
the dissolution of Yugoslavia and to discuss the work that still lies 
ahead.
    I am also pleased that we will hear later from three recognized 
experts on the Balkans--Daniel Serwer, Jim O'Brien, and General Bill 
Nash--each of whom, I am confident, will offer candid assessments of 
where these countries stand and of our policies in the region.
    There has been real progress throughout the Balkans since the dark 
days of the mid-1990s.
    Slovenia, Bulgaria, and Romania are scheduled to become NATO 
members next year.
    Albania, Croatia, and Macedonia are working together to prepare 
their candidacies for future membership.
    And all countries in the, region are working with the European 
Union to bring their institutions, laws, and economies into alignment 
with EU standards, in the hope of one day becoming members.
    Still it has not been an easy journey for many of the successor 
states of the former Yugoslavia, which to varying degrees, have 
struggled with divisive ultra-nationalist politics, difficult 
institutional reforms, organized crime, and, in the case of Macedonia 
in 2000, violent conflict.
    The most important element in preventing these many challenge's 
from completely destabilizing the region or derailing democratic 
reforms has been the presence of SFOR and KFOR, or more specifically, 
the presence, on the ground, of U.S. forces.
    For some time, I have cautioned the Administration against pulling 
up stakes and abandoning the as-yet-incomplete transition of Bosnia and 
Herzegovina, Kosovo, and Macedonia.
    In recent weeks, I am glad to note, the Administration seems to 
have seen the light.
    Perhaps our experiences in Afghanistan and Iraq have brought home 
the need to commit to nation-building for the long haul.
    Or perhaps the Administration's apparent epiphany was merely a 
reaction against the Iraq war policy of France, Germany, and Belgium, 
or to the French-German-Belgian meeting in late April to try to start a 
European Defense Union.
    Whatever the cause of the administration's conversion, I am 
encouraged by its renewed commitment to the Balkans and heartened by 
Deputy Secretary Wolfowitz's acknowledgment on May 17th that U.S. 
participation in SFOR and KFOR continue ``to be a very important 
mission to the U.S. and NATO and I think to the whole world, not to 
mention to the people of Bosnia and Kosovo.''
    Kosovo, in particular, still has a long way to go before meeting 
the standards of self-administration as envisioned in U.N. Security 
Council Resolution 1244 and as elaborated in U.N. Special 
Representative Steiner's benchmarks.
    This lack of progress has been used by some radical elements to 
promote their own agendas.
    There are Serbs in both Serbia and Kosovo who would like to see 
Kosovo, or at least parts of the province, returned to rule from 
Belgrade, perhaps through partition.
    And there are a few groups in the U.S. and some Albanian leaders in 
Kosovo--although by no means all--who have called for immediate 
independence.
    I believe that the extreme positions of both groups are misguided 
and that they purposely ignore the facts on the ground.
    First, the ethnic Albanian majority in Kosovo will never agree to a 
return to rule from Belgrade.
    But second, the elected leaders in Kosovo are not yet able to 
present a functioning democracy, governed by the rule of law, that 
guarantees the rights of all its citizens.
    The decision reached by leaders from Belgrade and Pristina at the 
EU summit in Thessaloniki last weekend to begin a dialogue on technical 
issues such as refugee returns and border controls--while leaving aside 
issues of final status--is a positive development that I hope we will 
support strongly.
    I also agree with the declaration in Thessaloniki that the future 
of the Balkans lies with the European Union. However frustrating the EU 
often can be to deal with, it clearly is the major force for 
integrating all parts of Europe into a prosperous whole. I, see no 
other path to lasting democratic stability for the Balkans.
    Getting there however, will require continued, hands-on U.S. 
involvement, including a U.S. military footprint on the ground, for at 
least some time.
    Once again, welcome to all of you. I look forward to hearing your 
testimonies.
    Thank you, Mr. Chairman.

    Senator Biden. Mr. Secretary, how long do you think it is 
going to take Kosovo to meet those benchmarks?
    Mr. Jones. I think these benchmarks are achievable in the 
near term rather than the long term. What exactly that means I 
think is something we don't want to predict at this stage.
    Senator Biden. Are you talking months, years?
    Mr. Jones. Again, I'm reluctant to get into specific 
timeframes, because what we're looking for----
    Senator Biden. I'm not asking specifics, but that's OK.
    Mr. Jones. I would like to just add that our great goal is 
to, as I say, elaborate these benchmarks so that we can better 
direct U.S. assistance to achieving them, because we want to 
achieve these benchmarks. It is in our interest.
    Senator Biden. Well, isn't it true what the Senator has 
been saying, that to achieve those benchmarks, it is not so 
much where we direct money, as it is someone there directing 
the operation, who knows they have our backing. What is your 
sense of the attitude of the European community generally, 
specifically any European country you would like to speak to, 
about final status?
    I've spent, as the chairman has, a fair amount of time in 
Kosovo and the Balkans. At the outset of this, even discussion 
of a, quote, ``final status,'' that was anything other than 
being part of Serbia was something that was a nonstarter in 
most of Europe, and this government wasn't particularly 
enthusiastic and you're not enthusiastic now.
    There are two resolutions out there right now, and you're 
opposed to both of them. The House resolution, which I'm 
opposed to, and an alternative resolution, which as you guys 
are aware I introduced and which is considerably less than what 
the House is asking for, or will probably ask for, and you 
oppose both.
    I'm just trying to get a sense of how you would 
characterize the generic attitude toward Kosovo these days, in 
terms of what we all know is going to happen, which is that 
it's going to have an independent status at some point or 
there's going to be another war. What are people talking about? 
What do you guys talk about over there? What do you think? Tell 
me where you think things are, and try not to be a State 
Department guy.
    We're very happy you're here, because the stupid Defense 
Department didn't even show up. They're the most arrogant group 
of people I've dealt with in 31 years. I can tell you, I feel 
strongly about that, so I'm very grateful you're here, I mean 
that sincerely. But all kidding aside, talk with me about how 
you see Kosovo playing out in Europe.
    Mr. Jones. First of all, I would like to say at the outset 
we are impatient, too, to see these standards fulfilled and 
Kosovo move forward, as I say, whatever its status may be.
    You asked about the attitude of European capitals. I've 
seen a fairly significant change over the last 2 years. You 
mentioned that perhaps some time ago there was a sense in 
European capitals about what the outcome should be.
    I believe everyone now in the international community has a 
very open mind about what the outcomes should be, and we all 
are united in the belief that it is not time to talk about 
outcomes, that it is time to make progress that will benefit 
the people in Kosovo, and it will benefit the people in Kosovo 
not just themselves, but their future, whatever their future 
is, because these standards are very basic standards that are 
required to be part of Europe and Euro-Atlantic structures in 
whatever form that may ultimately take.
    We also believe that to talk about outcomes now could 
undermine the progress toward those standards on things like 
dialog with Belgrade and refugee returns, and to talk about 
them could even provoke extremists so we believe it's the time 
to make progress on the standards that will protect the rights 
of everybody and develop the institutions for Kosovo's future, 
and as I said, I believe that in Europe there's agreement on 
that agenda.
    Senator Biden. What's the impact of the refusal of Croatia 
and possibly other countries in the region to sign an Article 
98 agreement with the United States on the nontransfer of each 
other's citizens to international criminal courts? What kind of 
impact does that have on the bilateral relations for Croatia 
and the other countries, with Europeans in particular?
    Mr. Jones. Different countries in this region have taken a 
different approach to signing an Article 98 agreement. Croatia 
is one that we don't expect to sign an agreement in advance of 
the July 1 deadline in the legislation, and I think that that 
cannot have otherwise but a negative impact on our 
relationship. It certainly has a negative impact on our ability 
to help with the sort of defense reforms that they are 
undertaking in order to move closer to NATO.
    Senator Biden. Will the signature of those agreements by 
Bosnia and other countries damage their chances of getting into 
the EU? It seems to me they're kind of between a rock and a 
hard place.
    Let me put it this way. What do you hear from your 
counterparts in those countries? What rationale do they give 
you for not signing? Do they say that they're in a hard spot, 
that they think it will impact on their relations and their 
prospects of getting in the EU? Without naming any specific 
country.
    Mr. Jones. What I have heard from counterparts in general 
is, I have not heard any objection to the idea of the 
substantive signing of the agreement, but I have heard of the 
reluctance to go against what they perceive as the EU common 
approach to the issue.
    Senator Biden. You may have spoken about this before I came 
in, and this will be my last question, Mr. Chairman. Did you 
speak to the issue of U.S. troop presence in the Balkans? Did 
you guys go through that at all?
    Mr. Jones. I would be happy to speak about it further if 
you give me a specific----
    Senator Biden. Well, if you have already, I won't bother to 
go through it. I don't know whether you've gone down that road 
before. In other words, did you all speak to what troop levels 
we anticipate maintaining, whether or not there continues to be 
a commitment, a willingness for NATO and other troops to stay 
engaged? If you've already spoken about it, my point is I won't 
take up the time of the committee on it.
    Mr. Jones. Well, perhaps briefly, if I could say that we 
are committed to those NATO military missions, and we see them 
as essential for the secure and safe environments both in 
Bosnia and Kosovo. In the 6-month review process that goes on 
at NATO each spring and fall, in the last one in the spring the 
decision was to maintain the presence of 12,000 in Bosnia and 
the U.S. presence at 1,800 and to reduce the presence in Kosovo 
down to, I believe it is 17,600 by the end of the year. That is 
based on a military assessment of what it takes to maintain a 
secure environment, and we're very comfortable with that. 
Another review will go on in the fall, and we will see where we 
are there.
    Senator Biden. The last question, Mr. Chairman. Does the 
administration consider Serbia and Montenegro's recent 
cooperation to meet NATO's Partnership for Peace requirements 
with respect to prosecution of war criminals having been met?
    Mr. Jones. We believe there has to be more cooperation with 
the tribunal in order for Serbia and Montenegro to be admitted 
into the Partnership for Peace. Secretary General Robertson has 
made that clear in a letter a year ago, and we very much 
support that position.
    Senator Biden. I realize that that is our position, but has 
the progress they have made thus far in your view and the State 
Department's view been sufficient?
    Mr. Jones. No, it has not been sufficient. The standard in 
Secretary General Robertson's letter is full cooperation, and I 
don't have the words right in front of me, but including all 
possible efforts to arrest all indictees, most notably General 
Mladic and Radovan Karadzic, and we don't believe that that 
standard has been met yet.
    Senator Biden. They're probably all hanging out with Saddam 
and Bin Laden, wherever they are.
    A last question. How would you assess the efforts of the 
Serbian Defense Minister in terms of the kind of reform of the 
Serbian military? I realize that was more appropriate for your 
counterpart who didn't show up.
    Mr. Jones. In fact, I think we are of like mind that we are 
very impressed with a very strong initiation of important 
reforms, including personnel change, including civilian 
control, including budgeting control, which has been a problem.
    In response, the United States organized a 2-day seminar 
for Defense Minister Tadic at the Marshall Center. We are 
looking at possibilities of assisting them with experts in 
defense reform and security service reform bilaterally, and 
then NATO is also looking at similar programs and starting 
programs to advise them on budget and personnel, so I think all 
of us are impressed and want to engage in that process.
    Senator Biden. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary.
    Senator Voinovich. I think the ranking member and I have a 
little difference of opinion on the final situation in terms of 
Kosovo. My thinking is, and it's one that I shared with the 
leaders of Kosovo, is that the issue of what the final 
settlement will be has a lot to do with how they move forward 
with the benchmark goals and respecting the rights of minority 
groups, and I agree with the State Department that if we start 
talking about that, then it may take the heat off of their 
doing the things that the benchmark goals call for.
    It seems to me if they follow the benchmark goals and stop 
some of the human rights violations that are going on over 
there things might improve--and you claim there is refugee 
return. From what I'm getting back, if anything there are more 
people leaving than I know coming back into Kosovo. I think 
that we need to really get a hold of that, as I mentioned to 
you before. And you mentioned that you're going to maintain 
12,000 troops in Bosnia, and then you're now talking about 
going down to 16,000 in Kosovo, is that it?
    Mr. Jones. It is 17,500 by the end of this year.
    Senator Voinovich. Do you think that's an adequate amount 
of troops to get the job done and create the environment you 
need to move forward so we can get on with any efforts to end 
these human rights violations and implementing the benchmark 
goals?
    Mr. Jones. We do. It's difficult to compare Bosnia and 
Kosovo in terms of numbers because of the size.
    Senator Voinovich. I'm talking specifically about Kosovo.
    Mr. Jones. About Kosovo, we do--there is, I think, the 
successes of the Kosovo Police Service, which are able to 
perform at a certain level, provide a certain level of 
security, to allow those numbers to come down to where we 
project at the end of this year, but we still believe that KFOR 
has a critical role to play, and plays it effectively with that 
deployment.
    Senator Biden. Mr. Chairman, on the point about whether you 
and I disagree, I'm not sure we do disagree. I shouldn't have 
been so short-handed, probably, I was trying to save time. The 
resolution I introduced expresses the sense of the Senate that 
the United States should declare its support for the right of 
the people of Kosovo to determine their political future once 
Kosovo has made progress, the requisite progress as defined by 
the United Nations' benchmarks.''
    So I view it as consistent. I think we're not very far off. 
I don't understand that we are far off. They have to make 
progress, the requisite progress on the benchmarks on 
developing democratic institutions and human rights protection 
before, so it's standards before status, but quite frankly, if 
I might say, and I know it's above both our pay grades here, 
but you guys should take a look at that again, because I think 
otherwise you're going to be presented with a resolution out of 
the House that puts status before standards, instead of 
standards before status.
    I could be wrong. That's a political judgment, but my point 
is, I agree with the Senator from Ohio that the way to get to 
final resolution is only after these benchmarks have been met, 
and implied in your question--I don't know whether you meant it 
or not, but I sense we agree that there's probably not enough 
muscle left in Kosovo if we draw down to be able to enhance the 
prospect of those benchmarks being met, so I think we probably 
agree.
    Senator Voinovich. There is no question about it. I'm glad 
that you shared that with me, but the OSCE and the UNHCR all 
said in March that security remains a problem in terms of the 
refugees' return, and the more heat that we can put on to get 
that taken care of, the better off it is.
    Senator Biden. I agree.
    Senator Voinovich. If you still have those major problems, 
then it becomes a real political issue in terms of Serbia. 
They're saying you're supposed to be doing these things, and so 
on and so forth, and before you know it you have an issue for 
some demagogue in Serbia to start raising it, and we go back to 
the way that Milosevic got started.
    Senator Biden. We are not in disagreement. My reference, 
again, and I would appreciate it, Secretary Jones, if you would 
maybe submit on my behalf a question to the Department, you 
would be the one that would transmit it, which would be, What 
is their formal position? Is their formal position on my 
resolution--which you all have a copy of, and I'll give you 
another copy still in opposition to that resolution?
    Senator Voinovich. Staying with getting to Serbia and 
Montenegro, a couple of things.
    Mr. Jones. Mr. Chairman, may I just comment on something?
    Senator Voinovich. Sure.
    Mr. Jones. I just wanted to make sure, because numbers are 
sometimes important, both on the refugee return and on the 
troop levels. I'm not sure I spoke correctly on the troop 
levels, but on the refugee returns, according to the UNHCR, 
last year there were 2,000 that at the time exceeded the number 
of people leaving Kosovo. This year so far, according to the 
UNHCR, there have been 900 returns, which is 20 percent more 
than in the same period last year. This is a small figure, but 
it is a top priority to make sure that figure increases, and we 
expect significant returns this year.
    On the troop levels, it's down to 12,000 in Bosnia and 
Herzegovina. I'm not sure if I misspoke. That's the current 
level now, and that is the level we will stay at.
    Senator Voinovich. You said you've stabilized that.
    Mr. Jones. We will review it in the fall.
    Senator Voinovich. But you are reducing Kosovo?
    Mr. Jones. Kosovo is 17,500.
    Senator Biden. Down from----
    Mr. Jones. Down from 25,000 in 2002.
    Senator Voinovich. On Serbia and Montenegro, when I visited 
with Carla del Ponte I was shocked, because I was supposed to 
be going over there and had to cancel, and she said, we know 
where Mladic is but we would like to give the information to 
somebody in the Serbian Government that we know will go after 
him. It was like she didn't have a whole lot of--in spite of 
what you've said about the cooperation and so forth, from her 
perspective it still isn't where it should be, and while I'm 
very pleased at the progress they've made recently, but are you 
really convinced that there's a real effort, and that they get 
it, and that they understand the need to cooperate with The 
Hague if they want to continue to move forward in terms of 
their relationship with us?
    Mr. Jones. I believe yes, and in fact I believe that the 
current political leadership very much wants that to happen. 
They understand the importance of that.
    There are a lot of elements to getting there. This is a 
police issue, an issue of defense security structures that are 
held over from the Milosevic era. It is an issue of cooperation 
on documents, sharing of documents, which has been problematic, 
and an issue of making witnesses available. It is a complex 
problem, but it is one that I believe we are committed to 
succeeding on, and we are committed to helping in every way we 
can.
    Senator Voinovich. Civilian control. I was glad to hear 
your response to Senator Biden's question that they're finally 
getting it--you have laid down some things that they've got to 
do in order to be given an invitation to Partnership for Peace. 
Again, you think there's some progress being made there, or at 
least they know now what they have to do?
    Mr. Jones. Yes, and the question of the Partnership for 
Peace is not directly the defense reforms themselves. I think 
everyone's satisfied that that has started, to the extent that 
it would be helpful for them to be in the Partnership for Peace 
to help those reforms go forward, but it's the issue of the 
cooperation with the tribunal, and the dropping of these suits 
against eight of our NATO allies in the International Court of 
Justice that is preventing them from joining Partnership for 
Peace so far.
    Senator Voinovich. The last thing on Serbia, where are we 
with normal trade relations with Serbia? I think that will go a 
long way toward giving those that are in authority--the United 
States wants us to do this and so on and so forth, yet we can't 
get normal trade relations with them. I think it is really 
important for their economy, which is not very good right now.
    Mr. Jones. We completely agree. We very much want to extend 
normal trade relations. It's been a conclusion of our legal 
specialists that this requires a legislative fix because of the 
legislation that removed normal trade relations, therefore 
we've worked to include that provision in the miscellaneous 
tariff bill, and we welcome it being passed.
    Senator Voinovich. So that's where it's at?
    Mr. Jones. That's right.
    Senator Voinovich. That is something we ought to try to get 
done.
    Senator Biden. Agreed.
    Senator Voinovich. A last question, in terms of Croatia, my 
understanding is that in the beginning, after Tudjman, Mesic 
and Racan were moving forward on refugee returns and doing some 
of the things that they should be doing, but that as time has 
gone by they have waned in terms of their commitment on refugee 
returns. Would you like to comment on where you think things 
are?
    Mr. Jones. Yes. I appreciate the question. It is an area 
that we have had high expectations of for quite some time now, 
that there would be more progress on refugee returns. We have 
discussed this frequently with our European partners, and in 
fact in March, when the European Union laid out its benchmarks 
for Croatia to become a candidate country for the European 
Union, they specifically included some benchmarks that we 
worked out together on improving the prospects for refugee 
returns.
    I think this caught the attention of the leadership in 
Croatia. They applied for the European Union membership in 
February, and in June, on June 12, they have laid out some 
plans they have for improving the ability of people to move 
back into their homes and for making reconstruction available--
some specific steps that would help refugee returns. We hope 
they follow through on that, and we're going to work to make 
sure that is the case, but we're pleased that we're at one with 
the European Union on this important issue.
    Senator Voinovich. Well, again on my trip I was going to 
meet with President Mesic and Prime Minister Racan and visit 
Topusko, which is the village where my relatives lived, and 
were part of the 250,000 who were pushed out in 1995 and I 
wanted to just see what the status was of the Voinoviches 
there, and didn't get a chance to do it, but I understand that 
there's still a long way to go in terms of refugee returns.
    A lot of it has got to do, too, I think with the economy, 
because people don't want to come back unless they've got a 
job, but I really think we need to make it clear in Kosovo and 
in Croatia and in parts of Bosnia and Herzegovina that we're 
dead serious about this refugee return thing, and even though 
it causes them political problems with the people that are 
there, that we're not backing off and they need to move forward 
with it.
    Any other questions?
    Senator Biden. I have no more questions. Thank you.
    Senator Voinovich. We certainly appreciate your being here 
today.
    Mr. Jones. I very much appreciate the opportunity. Thank 
you very much.
    Senator Voinovich. We're fortunate to have a great second 
panel, with Daniel Serwer and Jim O'Brien and Major General 
William Nash. We will begin our testimony with you, Mr. Serwer. 
We appreciate your being here.

 STATEMENT OF DANIEL SERWER, DIRECTOR, BALKANS INITIATIVE AND 
   PEACE OPERATIONS, U.S. INSTITUTE OF PEACE, WASHINGTON, DC

    Mr. Serwer. Thank you very much, Mr. Chairman, for the 
opportunity to talk to you today. I can't help but note that 
things must be going better in the Balkans when the biggest 
headline we've had in months is about a Croatian tennis 
victory. That's a lot better than 10 years ago.
    I want to summarize my written statement and submit that 
for the record if you would allow, Mr. Chairman.
    There are two serious transformations occurring in the 
Balkans today that the United States must pay attention to, and 
we must ensure their success. One is a transition from 
nationalism, dictatorship, and war to peace, democracy, and a 
European future. The other is a transition from U.S. to 
European leadership. It is important to note, on a day that the 
Europeans are in town seeing the President, that 10 years ago 
European-American cooperation in the Balkans was a disaster. 
Today it is a great deal better than it was then.
    Let me talk first about the transformation from war to 
peace. To protect our $24 billion investment in the Balkans 
peace processes, I think the United States needs to remain 
engaged, but it doesn't need to remain engaged in everything. 
It needs to remain engaged in those crucial things that can't 
be done without the Americans. There are just three things that 
are crucial.
    The first is security sector reform in Belgrade. It was 
accelerated after the Prime Minister's assassination, 
especially with respect to the army, but today it is flagging 
in the police and intelligence services. We need to push 
security sector reform hard. We need to provide more 
assistance, and if we need more money, we should take it from 
economic development funds. The Europeans have a great deal 
more money for economic development, and we should focus 
ourselves as much as possible on security sector reform.
    The second issue in which the Americans must remain engaged 
is the final status of Kosovo. It cannot be done without the 
Americans, and it cannot be put off indefinitely. I don't 
believe we need to decide final status today, but I do believe 
we need to prepare to decide final status, and to map out a 
process that would begin in 2005, after the election of new 
Parliaments and new Presidents in both Serbia and Kosovo.
    What do we need to do to prepare? We need to decide our own 
position. We need to consult with the Europeans. We need to 
decide what forum we intend to take this decision in. We need 
to signal that we are getting ready for this conversation over 
final status. The right way to signal that is to nominate an 
American to lead UNMIK, the U.N. mission in Kosovo this summer.
    Why is an American so important? Only an American can be 
expected to convince the Albanians of two things: that final 
status really does depend on proper treatment of Serbs and 
other minorities, and that the only way to final status is 
through a negotiation with Belgrade. There is no alternative to 
a negotiated solution.
    The third area in which the United States must remain 
engaged is rule of law. This is a permanent interest, not one 
from which we will be able to step back. We have a continuing 
U.S. interest in drugs, arms, terrorism, and human trafficking 
in the Balkans. The effort to get Croatia, Serbia, and other 
countries to transfer war crimes indictees to The Hague is part 
of our overall effort to establish the rule of law in the 
Balkans. I think we do need to pressure Zagreb a bit harder. 
They did transfer somebody, I believe yesterday, but they need 
to act also on the returns question, especially for Serbs.
    I am disappointed, frankly, in what Belgrade was able to 
achieve by the June 15 deadline. I think they should have done 
more. The administration has now done the certification, and 
what that does is to set up a showdown for the end of this 
year. Why? Because that is when Serbia and Montenegro will want 
to enter Partnership for Peace. That is when they should enter 
Partnership for Peace, and I'm glad to hear the administration 
testify that full cooperation with The Hague tribunal is a 
precondition.
    It is time to complete the process. The objective is not to 
withhold assistance from Belgrade. The objective is to get past 
the need to threaten the withholding of assistance from 
Belgrade.
    Let me talk for a moment about what is needed for a 
successful transfer of leadership to the Europeans. The 
Europeans need greater credibility in the Balkans, and 
credibility comes from vision, from unity of command and 
control, and also from close cooperation with the United 
States. What the EU did at its summit in Thessaloniki, which 
was to stop the decline of assistance to the Western Balkans, 
was a good step, but it was not a sufficient step.
    The Europeans need to start treating the Western Balkans as 
the potential members of the European Union that the Europeans 
say the countries of the Western Balkans are. They need to 
start providing the kind of structural assistance designed to 
bring up laggard countries within the European Union closer to 
European standards.
    It seems to me that the EU would also gain from supporting 
the United States on conditionality, in particular 
conditionality that is tied to The Hague tribunal, because 
acting together we will be able to convince Serbia and Croatia, 
which are the two countries in question, to turn over all of 
the war criminals.
    The Europeans would gain enormously from an arrest of 
Karadzic and Mladic and I have a specific suggestion for you on 
that subject. I think we should look to our Italian allies, who 
now command the sector in which Mladic and Karadzic presumably 
enter from time to time. I served in Italy for 10 years. I left 
their charge d'affaires in 1993, and I think I have enough 
experience to testify that they are capable of doing it, and 
that they will do it, provided that it is clear that that is 
what the United States wants.
    The EU also, in order to be successful, has to succeed with 
the relatively small military mission they have in Macedonia. 
They should take over the military mission in Bosnia only if 
the war criminals are in The Hague, and only if the military 
establishments in Bosnia are unified, something which I think 
can be achieved in a fairly short timeframe. James Locher is 
out there trying to do it now.
    Some will say I am unrealistic, but I believe that peace 
can break out in the Balkans if we keep our focus and 
persistence. I have worked a number of times with the U.S. Army 
on the ground in Kosovo. I have seen the people we trained 
there evolve into an NGO that conducts inter ethnic activities 
in the area of Gjilan/Gnijlane, which has been relatively 
peaceful as a result.
    The U.S. Institute of Peace started an Albanian-Serb young 
leaders dialog a year and a half ago, when people said it 
couldn't be done. We've continued that activity. It has grown 
and become a leading activity in terms of ethnic 
reconciliation.
    I believe that even the Serbia and Montenegro agreement 
that the Europeans negotiated and insisted upon has a silver 
lining to it. I am not a great fan of the agreement itself, but 
I believe it has demonstrated that you can create conditions in 
which violence is not an issue, and if there is a divorce 
between Serbia and Montenegro in the next few years, there is 
no doubt but that it would be a peaceful one.
    And finally, I would like to point to Brcko in Bosnia, 
which many of us regarded as the ultimate in insoluble problems 
in the Balkans. The problem there was left unsolved at Dayton. 
It was finally arbitrated by a panel led by an American 
arbitrator, and Brcko today is becoming a model for the rest of 
Bosnia. I think it is generally agreed, including by Paddy 
Ashdown, the High Representative, that what is being achieved 
in Brcko, if we could achieve it all over Bosnia, would be a 
very positive thing indeed. So I do believe that there's hope. 
I think we have made a lot of progress.
    The United States must remain engaged, but remain engaged 
on specific things that will help bring the peace process to a 
successful conclusion. Thank you.
    [The prepared statement of Mr. Serwer follows:]

 Prepared Statement of Daniel Serwer,\1\ Director, Balkans Initiative 
         and Peace Operations, United States Institute of Peace
---------------------------------------------------------------------------

    \1\ The views expressed here are those of the author, not the US 
Institute of Peace, which does not take positions on policy issues.
---------------------------------------------------------------------------
    Mr. Chairman, let me first express to you my appreciation for 
holding this hearing on the Balkans, even while Washington's attention 
is focused elsewhere. The United States has invested upwards of $24 
billion in Balkans peace over the past decade, a substantial amount 
even if it will be dwarfed by spending in Iraq. We need to protect our 
investment and ensure that it pays dividends to the American taxpayer. 
We also need to draw from the Balkans experience lessons applicable in 
Afghanistan and Iraq.
    There are two important transformations occurring in the Balkans 
today. The first is a transition away from nationalism, dictatorship 
and war towards peace, democracy, and a European future. The second is 
a shift of responsibility from the US, which led the Bosnia and Kosovo 
interventions as well as the fight against Milosevic, to the European 
Union, which shared leadership with the US in bringing peace to 
Macedonia and ultimately must lead the process of European integration 
for all of the Balkans. The objective of US policy should be to ensure 
the success of both these processes.
                           from war to peace
    Let me talk first about the transition within the Balkans, where 
Croatia, Romania, Bulgaria and Albania are leading the region towards 
NATO and the EU by concerted efforts to meet the membership 
requirements. I might fault each for shortcomings, but their 
leaderships are trying to match actions to ideals. It is especially 
important, now that Croatia is becoming a serious candidate for the EU, 
for Zagreb to arrest all indicted war criminals on its territory and 
accelerate the return of Serbs to their homes. No member of Partnership 
for Peace should be harboring an indicted war criminal.
    I will not catalogue current problems in the Balkans, which lie 
mainly in Serbia, Kosovo, Macedonia and Bosnia, but instead focus on 
those requiring continued US engagement. Solve these, and we can turn 
the Balkans over to Europe without endangering our investment.
    First among the problems requiring US attention is security sector 
reform in Serbia. It is all too clear in the aftermath of Prime 
Minister Zoran Djindjic's tragic assassination that it was a mistake to 
leave in place the network of criminals, security forces, businessmen 
and politicians that had been the backbone of the Milosevic regime. The 
crackdown the Serbian government pursued in the aftermath of the 
assassination should have occurred immediately after the overthrow of 
Milosevic in October 2000.
    Unfortunately, Belgrade's courageous efforts against organized 
crime are now flagging, human rights standards are being skirted, and 
the government is abusing its powers, especially in dealing with the 
press. The US needs to insist on respect for human rights and on deep 
reform of the police, army and security services. While the defense 
minister seems serious about embarking on the reform process, Belgrade 
needs to go much farther in dismantling Milosevic's police and secret 
service apparatus. The US should be prepared to expand significantly 
the $110 million or so in assistance that we provide to Serbia, 
focusing the additional effort specifically on reform of the security 
services and on the rule of law.
    The second problem requiring US attention is final status of 
Kosovo. Before the end of 2003, the UN Mission in Kosovo will have 
turned over all but a few powers to the Provisional Institutions of 
Self-Governance, in accordance with Security Council Resolution 1244. 
The UN will also have succeeded in opening a dialogue between Belgrade 
and Pristina on practical issues important to both Serbs and Albanians. 
Serbs have been calling for talks on final status in order to prevent 
drift into de facto independence and accelerate Serbia's move toward 
the EU. The Kosovar Albanians, for their part, want independence and 
will not sit still forever in an international protectorate.
    The US Government, in concert with European governments, has so far 
postponed consideration of final status indefinitely. The 
Administration rightly claims that Kosovo has not yet met all the 
standards the UN has set as preconditions. The crucial shortcoming is 
in treatment of Serbs and other minorities. The US should use the 
influence deriving from its special relationship with the Kosovar 
Albanians to convince them to allow Serbs and other minorities to 
return to their homes, worship freely, and travel without harassment or 
threat. If this happens, final status talks should begin.
    It will be difficult to postpone the opening of talks beyond 2005 
in any event. Both Serbia and Kosovo will by then have held 
parliamentary and presidential elections, and both will want the issue 
settled so that they can pursue closer association with the EU. The US 
needs to ready itself for a decision on Kosovo final status. Continuing 
refusal to face this issue will put us behind the curve, creating 
serious risks of unrest and instability. Europe cannot be expected to 
proceed on Kosovo final status without the US.
    The third main issue on which the US needs to focus is 
establishment of the rule of law throughout the Balkans. This requires 
transfer of all those indicted for war crimes to The Hague. We should 
look to our Italian allies, who now command the Bosnian sector in which 
both Radovan Karadzic and Ratko Mladic likely appear from time to time, 
to make these arrests at the earliest opportunity.
    Rule of law goes beyond war criminals and touches vital US 
interests, such as ensuring the Balkans offer no haven or transit point 
for international terrorists. Drugs and arms reach Europe from the 
Balkans and enrich its mafias, and until recently Serbian and Bosnian 
Serb companies supplied Iraq and Liberia with weapons, contravening UN 
embargoes. Terror, drugs and arms are permanent US interests in the 
Balkans. We should invest in building the institutions required to meet 
our own security objectives.
    Let me make clear what I think we could do less in the Balkans. The 
US Government should not engage heavily on economic reform and 
development--the IMF, World Bank and the EU are vastly better equipped 
and funded in this area. Likewise, social welfare concerns--while all 
too real and important--should fall to others. Most of the state-
building function--vital because the Balkan wars were due in large part 
to weak states--should fall to the EU, which will want to shape Balkan 
states in a European mold. Last but not least, NATO should lead on 
military reform. The US should play a role when needed through NATO or 
in bilateral activities that complement NATO's efforts.

                     FROM US TO EUROPEAN LEADERSHIP

    Let me turn to the transfer of leadership to the Europeans, who 
failed in the Balkans a decade ago but now have another opportunity. 
Today's Europe is better prepared. It has fielded an excellent team: in 
addition to Paddy Ashdown in Bosnia and Michael Steiner in Kosovo, 
Javier Solana, Chris Patten and Erhard Busek in Brussels. Europe has 
footed most of the bill for the Balkans, and provides most of the 
troops--now about 75%, vs. 15% for the US. European Foreign and 
Security Policy, while a shambles on Iraq, persists in the Balkans, as 
does successful European/American cooperation.
    The problem Europe faces is not its limited military capacity, or 
even its reluctance to use it. There is no Balkans military challenge 
today that the Europeans cannot handle. The real problem is 
credibility. The Europeans enjoy little respect--especially among the 
Albanians, but also among the Serbs and Bosnians--even though they pay 
the bills and even though the goal for all the peoples of the Balkans 
is integration within Europe.
    To make the vision of a European future more credible, the EU needs 
to stop treating the Balkans as a distant region to be stabilized and 
begin to view it as an area into which the EU will soon expand. This 
shift has already occurred for Romania and Bulgaria, but not for the 
Western Balkans, where until recently EU plans called for a steady 
decline in assistance through 2006, to half the level of 2000. At the 
Thessaloniki Summit last week the EU decided to halt this decline. But 
it needs to do more. It needs to increase its effort and provide the 
Western Balkans with structural assistance, which has accelerated 
economic development in other laggard areas of Europe. This would 
enhance EU credibility and spur the Balkans to serious reform efforts.
    The issue of credibility is not only one of resources and vision. 
Europe lacks common purpose and unity of command and control. It is 
easy to play the Europeans off against each other. To the extent they 
can agree among themselves, the positions they take are often the 
lowest common denominator. Rarely are they able to deploy all the 
levers of their considerable power to achieve a result, as Solana did--
perhaps unwisely--when he forced Montenegro to stay in a confederation 
with Serbia. More often, they find it difficult to coordinate economic, 
political, diplomatic and military instruments so as to achieve a 
clearly defined objective. Seldom do they even try. The proposed 
European Constitution offers some prospect for change, but in the 
meanwhile Europe needs to focus on improving its performance under the 
existing legal framework.
    The next test for the Europeans is Macedonia, where they have taken 
over the military task from NATO. The prospects are reasonably good, 
mainly because the Macedonian and Albanian participants in the new 
government are fulfilling their commitment to the peace process and at 
the same time to fighting crime and corruption, which are the greatest 
threat to the country's viability. Europe needs to focus on making its 
military mission in Macedonia a success. Then they can and should take 
over the military mission in Bosnia, assuming the war criminals are in 
The Hague and NATO has the vexing problem of unifying the Bosnian armed 
forces on its way to resolution.
    Regrettably, Europe and the US have failed to take one key step 
towards stabilization of Macedonia: diplomatic recognition by the name 
its Macedonian and Albanian citizens both prefer. This is a sensitive 
issue, but it is my hope that the US will sign a so-called Article 98 
agreement with the Republic of Macedonia, exempting US citizens from 
surrender to the International Criminal Court (ICC). Certainly when it 
comes to the ICC the US owes no deference to the EU.

                              CONCLUSIONS

    Before concluding, I would like to address two important policy 
questions:

   What should the US do about its assistance to Serbia, which 
        has been conditioned on cooperation with the Hague Tribunal?

   What should the US do about the final status of Kosovo?

    The US Administration has again certified that Belgrade's 
cooperation with the Hague Tribunal is sufficient to continue US 
assistance. I am disappointed that more was not done before the June 15 
deadline. There have been a number of high-profile arrests and 
transfers, but more than a dozen indictees are likely still at large in 
Serbia. The Administration, preoccupied with getting an Article 98 
agreement, was unable to obtain substantial support from the Europeans, 
who provide major benefits to Serbia and have great influence if they 
choose to use it.
    Secretary Powell's decision to continue assistance sets up a 
showdown for the end of the year: if Congress sticks with its six-month 
cycle of requiring certification, the next deadline will fall at about 
the time NATO considers Serbia and Montenegro's application for 
Partnership for Peace. The US and the EU should then insist on transfer 
of all indictees to The Hague. It is time to complete the process and 
put this matter behind us.
    On Kosovo final status, the US has tough decisions to make. What 
solution will it support, and how will it be sold to both Serbs and 
Albanians? While the Security Council will have to bless a decision on 
final status, the US has to decide in what forum it wants the issue 
negotiated and who will lead the effort. The US also has to make clear 
to all that Kosovo's final status will not be allowed to undermine the 
sovereignty or territorial integrity of Bosnia and Macedonia, where 
much of our decade-long investment in the Balkans lies. And the US has 
to insist on protection of Serbs and other minorities.
    The time has come for the US to signal readiness to consider final 
status by nominating an American to lead the UN mission in Kosovo. The 
Europeans have controlled both the civilian and military top jobs in 
Kosovo for four years. The right American UN chief of mission would be 
able to do what the Europeans have not done: convince the Albanians 
that the only way to final status is by correct treatment of Serbs and 
other minorities. It is especially important to disabuse Pristina of 
the notion that the US will unilaterally recognize Kosovo's 
independence and to convince the Albanians that they have to negotiate 
with Belgrade in talks sponsored by the EU and US.
    Some will say I am unrealistic, that Albanians and Serbs cannot 
even talk with each other, much less negotiate their own future, even 
with US and EU support. My experience says they can. I recently heard 
from a multiethnic group USIP trained in Kosovo three years ago at the 
request of the US Army--they have founded a professional organization 
and initiated an impressive range of multiethnic activities. USIP has 
conducted for more than a year and a half, with State Department 
support, dialogues among more than 100 young Serb and Kosovo Albanian 
political and civil society leaders. In addition to gaining better 
mutual understanding, they have embarked on joint efforts to encourage 
voting, counter organized crime and break the isolation of Serb 
enclaves in Kosovo. These young people--not the belligerent voices of 
their elders--are the future of Kosovo and the region. They merit our 
support and encouragement.
    We are today more than midway in the two transitions occurring in 
the Balkans: closer to peace than war, and closer to European than to 
US leadership. The right way out of the Balkans is to finish the job, 
withdrawing US troops and turning the Balkans over to Europe only after 
the essential remaining tasks have been accomplished: security sector 
reform in Serbia, a decision on Kosovo final status, and transfer to 
The Hague of all indicted war criminals.

    Senator Voinovich. Thank you. General Nash.

 STATEMENT OF MAJOR GENERAL WILLIAM L. NASH, U.S. ARMY (RET.), 
     JOHN W. VESSEY SENIOR FELLOW AND DIRECTOR, CENTER FOR 
PREVENTIVE ACTION, COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    General Nash. Thank you, Mr. Chairman. I appreciate the 
opportunity to address this hearing. I'm even happier that 
there is this hearing about the Balkans, given all the other 
things going on today. I, too, will summarize my comments, and 
would ask that my statement be placed in the record in its 
entirety.
    Initially, I would like to talk to you about the Council on 
Foreign Relations' recent Independent Task Force report, 
entitled ``Balkans 2010,'' and also ask that it be placed into 
the record. The report itself covered a range of issues that we 
believe to be vital for progress in the region: first the 
international role in the Balkans; second, public security, 
transitional justice, and the rule of law; third, we talked 
about economic restructuring and development; and then the 
return of refugees and internally displaced persons; and 
finally, civil society, education, and the media. But there are 
three recommendations from that report that I would like to 
emphasize.
    First, we recommend that the European Union and NATO be the 
primary agents of international influence in the Balkans over 
the coming decade, albeit with strong United States support and 
interests. We believe that the EU Stabilization and Association 
process, in conjunction with the continued NATO peacekeeping 
operations and NATO's Partnership for Peace program, should be 
the blueprints around which the international community can 
most usefully organize and prioritize its actions, initiatives, 
and penalties as needed.
    I believe it is in America's interest to recognize and 
support the EU's lead in setting the standards and providing 
the necessary assistance. An important role for the United 
States is to help the European Union stay the course and keep 
it accountable for its end of the bargain.
    The second area is the necessity of combating the parasitic 
political-criminal-nationalist syndicates that Senator Biden 
has described as remaining a destabilizing factor in the region 
and an obstacle to reform efforts.
    A principal recommendation of the Balkans Task Force was 
the implementation of vigorous campaigns aimed at crippling 
these criminal groups that threaten the internal and regional 
security. The tie between these groups and the political 
activity and obstructionism is very important to understand, 
because the relation between failing on standards and 
criminals, is clear time and time again.
    I agree with Dan Serwer, that drugs, arms, terrorism and 
trafficking is one area where the United States should stay 
very involved, and we should firmly support those efforts with 
money and manpower, because reform won't stick, and public 
security won't be established, as long as the politico-criminal 
groups are allowed to exist.
    The third recommendation, related to the second, is the 
importance of building the rule of law, both criminal and 
civil, in the Balkans. You cannot talk about building the rule 
of law in the region without reiterating the absolute necessity 
of arresting war criminals, especially Radovan Karadzic and 
Ratko Mladic. The United States still has a lot of pull in the 
region and needs to stay engaged in order to encourage 
constructive change, and I believe that conditionality remains 
the best stick we have to ensure progress on these fronts.
    Two of the specific issues, sir, you asked us to address 
are the status of the reform effort, including defense reforms, 
in Serbia and Montenegro since the Prime Minister's 
assassination, and NATO's role in the Balkans. I would like to 
elaborate and provide my personal views on these subjects.
    The key for maintaining reform and progress in Serbia and 
Montenegro, as elsewhere in the region, is to tangibly 
strengthen the hand of reformist groups in the government while 
marginalizing those who oppose reform. There are two steps the 
United States could take now that will serve this end. The 
first is to use America's influence within NATO to strongly 
support Serbia and Montenegro's recent application for 
admission to the Partnership for Peace program.
    I agree with the use of conditionality with respect to 
Mladic that the Department of State representative mentioned, 
but having Serbia and Montenegro as an active participant in 
the Partnership for Peace program is important to underwriting 
the reforms the country needs to establish democratic control 
of its military and security forces.
    I would add parenthetically, Mr. Chairman, that it's my 
belief that the Partnership for Peace program itself needs new 
energy and added emphasis from American leaders as well.
    A second way that the United States can reward progress to 
Serbia and Montenegro, while furthering defense reforms, is to 
open up our professional military education programs to junior 
officers at this time--lieutenants through majors is what I 
would recommend--in the Serbia and Montenegro army.
    Beginning the training of the next generation of military 
leaders will be indispensable in reaching the standards of 
professionalism and democratic control that the military needs, 
and I think this is a carrot that we can give now to junior 
officers, and as they complete their cooperation and 
demonstrate that reforms are taking hold, we can expand the 
IMET program here in the United States.
    I believe NATO has a constructive role to play in military 
reform and security. I remain convinced that NATO's 
peacekeeping operations in the region should continue at the 
current force levels until effective alternative public 
security forces have been developed.
    At the present time, only NATO has the capability to 
maintain the large, much-needed forces in Kosovo and Bosnia. 
Second, and this gets at the issue of U.S. involvement in the 
NATO peacekeeping operations, I strongly believe that the 
presence of U.S. troops in the Balkans is vital to demonstrate 
our country's willingness to do what it takes to win the peace, 
which, as we have seen in recent times, is just as important as 
winning the war.
    I emphasize the importance of maintaining NATO's 
peacekeeping operations in the region at the current levels, 
and the current ratio of U.S. to other NATO contributors is 
just about right. And 4,500 is the number we're heading toward. 
That is only 12.5 percent of the overall total. It is not 
excessive.
    I would also recommend an increased evolution of NATO's 
role from providing security, to being a security development 
force and working with the local armies more and more, again 
primarily through the burgeoning Partnership for Peace 
exercises in the region.
    With respect to Kosovo, I strongly endorse UNMIK's policy 
of standards before status. It is sound and deserves our 
support. Earlier, the administration representative talked 
about sending the planner. We need less planning now, sir, and 
more execution of the plans that exist, so I don't get too 
excited about planners. I get excited about doers.
    Again, thank you very much for allowing me to speak, and I 
endorse your interest and the commitment of the United States 
in the endeavor. I'd be happy to answer your questions.
    [The prepared statement of General Nash follows:]

Prepared Statement of Major General William L. Nash, U.S. Army, (Ret.), 
   John W. Vessey Senior Fellow and Director, Center for Preventive 
                  Action, Council on Foreign Relations

    Mr. Chairman, thank you for inviting me to address this hearing of 
the Senate Foreign Relations Subcommittee on European Affairs. My 
initial comments will focus on the findings and recommendations of the 
Council on Foreign Relations' recent independent task force report, 
Balkans 2010. I will conclude with some personal views on the situation 
in the Balkans. I ask that the full text of our report be entered in to 
the record. Unless otherwise noted, the report reflects the consensus 
views of task force members. I should clarify at the outset that when I 
say ``Balkans,'' I am referring primarily to the states of the former 
Yugoslavia, with the exception of Slovenia.
    As noted in our report, much progress has been made in the 
Balkans--particularly since Slobodan Milosevic's fall from power in the 
fall of 2000--but there is still a lot of work remaining to ensure that 
the successor states become stable, democratic, economically self-
sufficient, lawful, and secure partners in a regional and European 
framework. So the question is, how to get there? The Balkans 2010 
report covered a range of issues vital for progress in the region--
including the international role in the Balkans; public security, 
transitional justice, and the rule of law; economic restructuring and 
development; refugees and internally displaced persons; and civil 
society, education, and the media--but there are three recommendations 
in particular that I think are key in the context of this hearing.
    First is ensuring that the European Union and NATO are the primary 
agents of international influence in the Balkans over the coming 
decade, albeit with strong U.S. support and interests. The EU's 
Stabilization and Association Process, in conjunction with continued 
NATO peacekeeping operations and NATO's Partnership for Peace program 
and Membership Action Plan, are the blueprints around which the 
international community can most usefully organize and prioritize its 
actions, incentives, and penalties. Taken as a whole, these programs 
provide the necessary standards for association with, and integration 
into, Europe, which is absolutely crucial to a successful future for 
the Balkan states. It is in America's interest to recognize and support 
the EU's lead in setting standards and providing assistance, and to 
help the EU stay the course and keep it accountable for its end of the 
bargain.
    Second is the necessity of combating the parasitic politico-
criminal-nationalist syndicates that, as Senator Biden has said, 
``remain a destabilizing factor in the region and an obstacle to reform 
efforts.'' A principal recommendation of the Balkans 2010 task force 
was the implementation of vigorous campaigns aimed at crippling these 
criminal groups that threaten internal and regional security. The 
initiatives undertaken by the Serbian government since Prime Minister 
Djindjic's assassination are a significant step, and it is important 
that authorities in other areas, including the Office of the High 
Representative (OHR) in Bosnia, the UN Mission in Kosovo (UNMIK), and 
the government of Croatia, follow suit with targeted campaigns of their 
own against the individuals and groups implicated in the illegal 
intersection of government and financial power. The United States 
should firmly support these efforts with money and manpower because, 
simply put, reform won't stick and public security won't be established 
as long as these politico-criminal groups are allowed to exist.
    The third recommendation, related to the second, is the importance 
of building the rule of law, both civil and criminal, in the Balkans. 
You can't talk about building the rule of law in the region without 
reiterating the absolute necessity of arresting war criminals, 
especially Radovan Karadzic, Ratko Mladic, and Ante Gotovina, and 
sending them to The Hague. It is encouraging to see the recent arrest 
of Veselin Sljivancanin, the third most wanted fugitive after Karadzic 
and Mladic, on the eve of the U.S. deadline to withhold its aid 
package. This demonstrates two things: that the U.S. still has a lot of 
pull in the region, and needs to stay engaged in order to encourage 
constructive change; and that conditionality remains the best stick we 
have to ensure that progress on this front continues, and in particular 
that Karadzic and Mladic are brought to justice sooner rather than 
later.
    Two of the specific issues that this hearing seeks to address are 
the status of reform efforts, including defense reforms, in Serbia and 
Montenegro since Djindjic's assassination, and NATO's role in the 
Balkans. I'd like to elaborate on both of these topics, in part because 
of the linkages I see between them.
    I've already touched on Serbia's recent campaigns against the 
criminal syndicates, which deserve our continued support. The key for 
maintaining reform and progress in Serbia and Montenegro, as elsewhere 
in the region, is to tangibly strengthen the hand of reformist groups 
in the government, while marginalizing those who oppose reform. There 
are two steps that the United States can take now that will serve this 
end.
    The first is to use America's influence within NATO to strongly 
support Serbia and Montenegro's recent application for admission to the 
Partnership for Peace program. Having Serbia and Montenegro as an 
active participant in Partnership for Peace is important for enabling 
the reforms that the country needs to establish civilian democratic 
control of its military and security forces. I might add, Mr. Chairman, 
that the Partnership for Peace program itself needs new energy from and 
emphasis by American leaders.
    A second way that the U.S. can reward progress in Serbia and 
Montenegro, while furthering defense reforms, is to open our 
Professional Military Education programs to junior officers--
lieutenants through majors--in the Serbia and Montenegro army. 
Beginning the training and education of the next generation of military 
leaders in Serbia and Montenegro will be indispensable in reaching the 
standards of professionalism and civilian democratic control that their 
military needs to face the challenges of democratization and be 
responsible partners in a regional security framework, and serves as an 
appropriate carrot for ongoing reform.
    I believe that NATO has a constructive role to play in military 
reform and security in Serbia and Montenegro. Moving on to the role of 
NATO more generally, I remain convinced that the NATO peacekeeping 
operations in the region should continue at the current force levels 
until effective alternative public security forces have been developed. 
Much has been made of the recent handover of the NATO mission in 
Macedonia to the European Union, and I support that transition and the 
EU's willingness to take on greater responsibilities in this area. But 
that is by no means a template for the NATO forces in Bosnia and 
Herzegovina and Kosovo, for two reasons. First, despite the handover, 
the EU still does not have the capability needed to take on even the 
small-scale mission in Macedonia. Rather, the European Union's 
assumption of the mission was made possible by an EU-NATO agreement 
giving the EU access to the collective assets and capabilities of NATO, 
and NATO maintains a senior civilian representative and senior military 
representative in NATO headquarters in Skopje. At the present time, 
only NATO has the capability to maintain the much larger, much needed 
forces in Kosovo and Bosnia.
    Secondly--and this gets at the issue of U.S. involvement in the 
NATO peacekeeping operations--I still strongly believe that the 
presence of U.S. troops in the Balkans is a vital demonstration of this 
country's willingness to do what it takes to ``win the peace,'' which, 
as we've all seen in the past few months, is just as important as 
winning the war. Therefore, I emphasize the importance both of 
maintaining NATO's peacekeeping operations in the region at the current 
levels, and of continuing the current ratio of U.S. troop contributions 
to those operations. At present there are less than 4,500 U.S. troops 
in the Balkans, and I recommend that this number remain stable. I also 
envision that NATO's role in Bosnia and Kosovo can evolve with the 
security situations in the two areas, moving from security provision to 
security development as appropriate. This latter initiative should be 
the major focus of the Partnership for Peace exercises in the region.
    Finally, with regards to Kosovo, UNMIK's policy of ``standards 
before status'' is conceptually sound and deserves our support, which 
requires resources that, unfortunately, have not been entirely 
forthcoming from the international aid community or private investors.
    In closing, I thank the Committee for giving me the opportunity to 
speak to you today, and for keeping a focus on the Balkans during a 
time when there are so many other pressing issues on the world stage. 
It is this long-term commitment by the U.S. and its allies that has 
been at the heart of the remarkable transformation of this region. 
Until recently, I never thought I'd have to defend the idea that 
staying the course and finishing a job is a crucial part of any 
international intervention. But we would not be at this juncture, 
discussing the progress of these fledgling democracies, if we had not 
gone through these often messy, complicated, but worthwhile tasks. 
Thank you.

    Senator Voinovich. Thank you. Mr. O'Brien.

 STATEMENT OF JAMES C. O'BRIEN, PRINCIPAL, THE ALBRIGHT GROUP, 
                      LLC, WASHINGTON, DC

    Mr. O'Brien. Thank you, Mr. Chairman, for inviting me and 
for having this hearing. I began work on the states that have 
emerged from the former Yugoslavia when the wars started in 
1991, and I was involved in establishing the international 
tribunal. I participated in all major rounds of peace talks 
through 2001. I finished my career as the President's envoy for 
the Balkans, responsible for U.S. policy at the time Slobodan 
Milosevic fell.
    I'm very glad now to see these states on the cusp of what I 
think is a great achievement, and to see them at peace, and I'm 
very glad to be able to speak about them before this committee.
    The committee has an august history, but I think no more so 
than on this issue. I know in your time here since 1999 you've 
been an active voice, Mr. Chairman. I think its members can be, 
as a whole, proud of the role that they've played in prodding, 
now, three successive administrations to remain engaged and 
become more effective. I think it's a great example of what 
congressional oversight means in our system.
    The states of the Balkans now, the former Yugoslavia, are 
on the verge of an historic achievement. For the first time, 
everyone there lives in a democracy. For the first time in 
hundreds of years, the states of mainstream Europe have agreed 
that the Balkans is part of the same neighborhood. Those states 
will work to bring them into the European Union. The United 
States has a special role to play in guaranteeing that 
arrangement.
    The challenges have been outlined, particularly those of 
organized crime, and we need to work on those things. At the 
same time, the strategic environment in which we operate has 
changed greatly, and U.S. priorities have changed with it. 
We're left confronting challenges in this new environment. We 
need to look at what changes we need to make in the Balkans in 
order to be able to succeed. I think the lessons we take from 
the Balkans are the following.
    First is that an effort to help a country rebuild itself 
requires time and commitment and vast resources. A corollary to 
that is that it takes partnerships. I want to focus the rest of 
my remarks on partnerships as I move through, because I think 
we need to dust off a few of them and revise them slightly so 
that we are able to achieve the results that we want in the 
Balkans. We also will see lessons as we confront challenges 
elsewhere in the world.
    The first challenge we want to look at is with reforms in 
the region. The United States has succeeded over the last 
decade when we have engaged in a strong partnership with 
progressive voices in the region and provided them with the 
ammunition they need to confront the forces who want to hold 
the region back. Now, that creates a whole series of 
opportunities today. Let's focus on Serbia and Montenegro.
    I think there the primary challenge is reform of the 
security services, and I appreciate U.S. assistance as they're 
moving forward. Part of breaking the back of the hardliners in 
that system is to try to arrest the remaining fugitives from 
the international tribunal.
    Now, our policy, since you, Mr. Chairman, and I were 
speaking in 1999 and 2000, was all predicated on the assumption 
that if we set a strict condition the reformers can force 
others to go along with it. That worked only because the U.S. 
helped them pick the time of the battles with the 
obstructionists, and we backed up the reformers at each step. I 
think the assassination of Zoran Djindjic shows us what happens 
when we allow the obstructionists to pick the battles, 
especially when our attention is elsewhere.
    So the question is, how can we most effectively move 
forward today with the leverage that we have in partnership 
with the reformers in Serbia and Montenegro? I think it's not 
enough to set a condition and wait to see if Mladic shows up in 
The Hague. He belongs in The Hague, but I think here we need a 
more active approach. I suggest that the United States help 
develop a road map and provide active support.
    We have experience looking for fugitives in territory we 
control. We know what steps should be taken by a government 
acting in good faith. We should work with the Serb authorities 
to develop a set of practical steps, fully transparent to us, 
so that we are able to see that they are trying as hard as 
possible to arrest this man and turn him over, and the same 
with any other fugitives who may enter their territory.
    I think that right now a policy of dictating a condition 
and sitting back is insufficient for the challenge that lies 
before the authorities there. They have taken courageous steps 
since March of this year, and I think we need to work with them 
so that they are able to take the next step. It's not enough 
simply to dictate and sit back.
    I agree with the comments that my colleagues have made on 
the other immediate issues facing the region, and I'll be happy 
to elaborate on those, if it is appropriate, during question 
time. There are a few other partnerships we need to pay 
attention to. I think we need partnerships of the states 
emerging from the former Yugoslavia, and I think it is time we 
asked things of them on the international front. They have 
great resources that can be made available to operate with us 
as we face challenges in Iraq, in the greater Middle East, and 
elsewhere.
    Bosnia has already managed to contribute a peacekeeping 
police unit in East Timor. I think the more we ask of states in 
that kind of constructive way, the more they will see 
themselves as participants on the international stage, and as 
representatives of something that is worthwhile and has 
something to teach the rest of the world, rather than seeing 
themselves as objects of a vast international experiment.
    A third partnership we should attend to is a partnership 
with the neighbors of region. Here I think it is important to 
recognize that all of the neighbors of what was Yugoslavia, and 
Slovenia as well, have gone through transitions. They have 
managed them on the whole quite well. They are on the verge of 
becoming NATO allies if they are not already, and members of 
the European Union.
    They understand Yugoslavia in a way that we do not, and 
they have a strong interest in remaining involved there even as 
our attention turns elsewhere. The more that we work actively 
with them, whether through special vehicles like the Stability 
Pact, or SECI, or through new initiatives directly with them, 
the more fingertip feel we will have for what will work on the 
ground.
    I think Slovenia deserves a great deal of credit for what 
it has done in recent years in particular, in working with the 
states of the former Yugoslavia. Hungary and Romania have just 
begun a set of very interesting initiatives with Serbia in 
municipalities and also on police and customs reform. I think 
those are the kinds of things we need to be encouraging.
    A fourth partnership is with the European Union. From the 
start, we insisted that the goal of our engagement in the 
Balkans be the creation of a Europe, whole and free, and it is 
thus appropriate that the European Union shoulder the lion's 
share of the burden. It provides more than 80 percent of the 
civilian and military resources, has done so, and should 
continue to do so. The U.S. military has to stay, however, and 
there has to be a very active creative U.S. political presence.
    We are the only state with credibility with all parties, 
and we have the ability, I think, to design creative tools that 
will help the reformers in the region succeed on their own 
terms. I think that's especially important today. In 
Thessaloniki, the European Union changed the way it approached 
the region. It announced that integration was its new buzz 
word.
    Now, it didn't do as much as I would like. I would have 
much preferred the strong version of this that Dan Serwer 
discussed, where it would treat all these states as accession 
countries, eligible for full structural assistance, but it has 
now made it possible for a variety of new things to happen, for 
these countries to engage some of the home directorates of the 
European Union, for the companies from those countries to bid 
on European Union contracts, and for a range of other changes 
in the way that the countries are addressed by the European 
Union. To be honest, Mr. Chairman, nobody really knows what 
that means, including the European Union.
    There is room in this process for creative, effective 
diplomacy, to devise new ways of engaging the Balkan states so 
that conditionality comes with a stamp that says both made in 
Washington and made in Brussels, but more importantly, so that 
all of the international assistance is done in a way that 
amplifies the ability of the reformers to achieve what they 
want--which is what we want.
    The final partnership that matters in the Balkans is 
partnership with the broader international community, in the 
United Nations and also all of those states from around the 
world who have stood by the people of the Balkans in recent 
years. It was very difficult to create an international 
consensus that intervention in the states of the former 
Yugoslavia was right. It took years. Those years cost lives, 
and I wish we had moved sooner, but the consequence of the 
patient diplomacy of building this coalition is that today, 
what we have on the ground is more durable than it would have 
been with a rapid U.S. intervention on our own.
    We now have even the skeptics about initial intervention, 
such as Russia, participating to try to see it be effective, 
and it will remain effective because it is now embedded in a 
network of international commitment and national promises by 
countries from around the world. Even when U.S. attention has 
to turn to priorities elsewhere, we have a framework in which 
those states can remain assured that they are able to move 
forward.
    So Mr. Chairman, I appreciate the opportunity to appear 
before you. We have a strategic interest there. We have to 
remain engaged, and the way in which we have done that, I 
think, has set the groundwork in which the reformers of the 
region are able to move forward toward a Europe whole and free.
    [The prepared statement of Mr. O'Brien follows:]

Prepared Statement of James C. O'Brien, Principal, The Albright Group, 
                                  LLC

    Mr. Chairman, thank you for the opportunity to testify today.
    Over the last decade, this region bled at its torn edges. Today the 
states that have emerged from the former Yugoslavia are on the cusp of 
great successes, and it is a privilege to speak about them before this 
Committee.
    This Committee has an august history, and on this subject in 
particular its members can be very proud. Speaking as someone who was 
inside two Administrations I can attest that your criticism was always 
constructive, especially when it was well deserved. The Committee's 
record on the Balkans testifies to the importance of congressional 
involvement and oversight.
    My governmental work on the Balkans began when the wars started. I 
was then a career attorney in the State Department. There, I helped 
argue for and support the International Tribunal, participated in the 
major peace negotiations in the region once the US became active in 
1994, and then finished my time in government as the President's envoy 
for the Balkans, with responsibility for US policy during, among other 
events, the transition to democracy in Belgrade.
    As with any U.S. foreign policy, our approach to the states that 
have emerged from what was Yugoslavia should be measured by how well 
the policy promotes the security, prosperity, and values of the United 
States and our friends.
    Seen in that light, the Balkans, including these states, have 
become a success story on the verge of becoming historic. After a 
decade of bloodshed and international stumbling, for the first time in 
hundreds of years--since empires brushed against one another on this 
territory--the people of the Balkans are part of a Europe whole and 
free. All states of the region are democratic; our European partners 
have joined with us in securing this end; the global community has 
endorsed and contributed to our success; and security threats from 
terrorism and crime are much less than they were when dictatorships and 
paramilitary forces set the order of the day.
    But the strategic environment facing the United States has changed 
greatly before the job is done. As we turn our priorities--properly--to 
challenges from central Asia, the Caucuses, and the Middle East, we 
need to reflect on the way we have carried out our policy in the 
Balkans.
    The primary lesson we should take from the Balkans is that it 
requires time, resources, and commitment to help countries rebuild 
themselves. A corollary is that our initial successes may fade quickly 
unless we work in partnership with others.
    America's attention and effort can be commanded by emergencies and 
threats anywhere in the globe. When we work in partnership we have 
resources that remain in place, multiplying our commitment and bringing 
skills we may need, so that we have the flexibility to respond where we 
must.
    At times we may believe that we have the resources, sense of 
urgency, and finger-tip feel to do it on our own. Even then, Mr. 
Chairman, we face a problem in perceptions. Those who oppose us know 
that American administrations sometimes change their minds and 
sometimes just plain change. They are willing to bet their lives, and 
the lives of our soldiers, that they have more staying power than we 
do. Our best and safest answer is to be there with partners--then we 
have the latitude to reduce our engagement while our coalition remains 
in force.
    In the states of the former Yugoslavia, our partnerships need to be 
dusted off and revised in the new strategic environment. In my 
testimony today I want to review several core partnerships and suggest 
some ways forward.
    First, partnership with reformers in the states of the former 
Yugoslavia. The states that have emerged from Yugoslavia still face 
great challenges. Democracies are not rooted deeply. Organized crime 
threatens to overwhelm law enforcement resources. Tensions from the 
wars of the last twelve years continue to fuel resentment.
    The United States has done well and good in the Balkans when we 
have amplified the voices and magnified the strength of the people and 
groups who speak for a future in Europe. This includes civil society, 
political parties, and people who aspire to positions in government.
    For example, in Serbia and Montenegro, a democratic government has 
shown great resolve in the aftermath of the cowardly assassination of 
Prime Minister Zoran Djindjic. Prime Minister Zivkovic has shown 
particular courage and integrity. Still, the government has not done 
everything it must to meet the conditions set by the Administration.
    The question is how we can best achieve not just the specific goals 
announced by the Administration but our broader objective of seeing 
Serbia and Montenegro represented by officials who share our belief in 
a Europe whole and free. The test, in short, is what US policy will 
strengthen reformers.
    Since the fall of Milosevic our policy has been predicated on the 
belief that reformers would always benefit from a clear goal, one that 
would force them to confront the Milosevic-era holdovers. This worked 
for the first year or more of the democratic government, because we 
helped choose the confrontations and backed the reformers at key 
points. The murder of Zoran Djindjic shows us the dangers of letting 
the criminals choose the points of confrontation.
    We need again a policy that helps picks the confrontations and the 
reformers win. For example, Ratko Mladic belongs in jail in The Hague. 
It is not enough, however, to declare a goal and wait to see what 
happens. Our own government has experience in what must be done to find 
fugitives--and has been reminded how difficult it can be to succeed. I 
suggest that we draw on both experiences: develop a roadmap with the 
government in Belgrade to lay out the steps that they should be taking 
and a means to reassure ourselves that the government is in fact 
acting.
    In Kosovo, final status negotiations have begun already. Each side 
has announced its dissatisfaction with the current situation. 
Extremists are trying to goad the other into offering a proposal first, 
knowing that the side in the biggest hurry will pay the largest 
premium. Direct talks on non-status issues will begin soon.
    The UN representative, Michael Steiner, has recognized that, in the 
current early stages of negotiation, he has leverage stemming from when 
he puts the issue of status on the formal agenda. He is insisting that 
the agenda focus on standards before status is discussed.
    This is the right approach, I believe. More practically, it is the 
approach we have. If we try to change the bar or specify the outcome of 
the process we will encourage those who believe that waiting and 
complaining is the way forward. Our goal should be the opposite--to 
empower those who recognize that performance is the way forward.
    Bosnia still wrestles in the grip of pseudo-nationalists who enrich 
themselves and impoverish the rest of the country. The answer is to 
follow the money. If we take away their control of the country's 
resources, a new country can grow up in their place. Paddy Ashdown's 
emphasis on business development, property rights, and the dismantling 
of the crony networks--especially in defense--is exactly right. He is 
ably supported by Ambassador Robert Beecroft and the OSCE Mission, 
another strand in the partnership network that keeps working as US 
attention turns elsewhere.
    Second, partnership with the states emerging from the former 
Yugoslavia. A layered relationship of personal, economic, and security 
ties will help U.S. interests as these states take their rightful place 
in Europe. Many leaders of today's ``new Europe'' have long-standing 
personal and professional ties to the United States; this helps them 
understand our positions and work with us as partners. The next 
generation of leaders will look more toward Europe, however. We should 
cultivate friends where we can now.
    Moreover, the states we are discussing will grow more quickly if we 
ask something of them. These states have resources and lessons 
applicable elsewhere in states rebuilding after conflict and internal 
tension. Each will grow as they see themselves a subject on the world 
stage, not an object of intervention whose every political tension is 
magnified by intense examination.
    Third, partnership with the countries of the region. The United 
States succeeded in the former Yugoslavia when we worked in close 
partnership with Hungary, the Czech Republic, Slovakia, Slovenia, 
Romania, and Bulgaria. They are on the path to full NATO and EU 
membership. They have experience in transitions. They are deeply 
connected to the states of the former Yugoslavia. And they have every 
incentive to remain engaged even as senior U.S. resources turn toward 
other challenges.
    Eventually, I hope that the EU accession process can become the 
focal point of activity, but the creativity of these different 
partnerships deserve our respect and support. For example, Hungary and 
Romania have begun very interesting initiatives with Serbia and 
Montenegro. The Southeastern Europe Cooperation Initiative has 
constructive programs on trade and transportation and cross-border 
corruption that are showing results after years of investment. The 
Stability Pact is slowly developing its capacity to help regional 
integration. Slovenia has made an impressive transition toward European 
institutions. It deserves recognition for what it has done and, I 
believe, has acknowledged that it has a responsibility toward its 
neighbors.
    Fourth, partnership with the European Union. The United States is 
the guarantor of a deal struck in 1999--the states of the region aspire 
to EU membership, and the EU agrees to take them in. The EU shoulders 
the lion's share of the burden (more than 80% of civilian and military 
assistance). But the United States must maintain its military and 
political presence.
    This deal has just evolved. In Thessaloniki the EU has decided that 
integration is the organizing principle for its relations with the 
Balkans. The meaning of this remains unclear, and it is not as much as 
I would have liked. The European Stability Initiative, a very 
innovative and influential think tank, has proposed that the EU make 
these states eligible for structural assistance funds. This is an 
excellent idea. In practical terms, Thessaloniki brings much that is 
new: the states of the former Yugoslavia may be able to engage with the 
Commission's home directorates; bid for EU contracts; and have 
opportunities beyond the special assistance packages offered in recent 
years.
    The still-uncertain nature of the Thessaloniki commitment creates 
opportunities for the United States. Creative diplomacy should work to 
create a process very much like the access process, with funding 
comparable to structural assistance funding, and creative forms of 
conditionality should be added to our toolkit.
    Finally, partnership with the international community. In the 
Balkans, the international community worked with us to knit a Europe 
whole and free. It took years of patient effort, persuasion, 
leadership, and listening to piece together commitment toward that 
objective. In the end, even skeptics like Russia joined us to help 
implement it. The price of the time it took in human lives was too 
high, and I wish we had moved more quickly.
    But the payoff of partnerships has been large. Our partners bring 
resources, skills, and attitudes that supplement our own, and their 
involvement makes the international commitment durable. When the US 
acts without partners, our friends may be tempted to wait for us to 
fail. When we act with them we are all invested in success, and the 
United States has the flexibility to reach elsewhere around the world 
as our security, prosperity, and values require.
    Mr. Chairman, the United States has a strategic interest in the 
Balkans. An effort to project power from Europe will collapse if the 
states we discuss today cannot support the effort. Porous borders and 
criminal syndicates will combine to expose Europe to drugs, violence, 
and terrorism. We must stay involved. To do that in today's world 
requires that we appreciate the partnerships that multiply our 
resources.

    Senator Voinovich. Thank you. I really enjoyed your 
respective perspectives on this. I would like to get to the 
issue of the leadership in Kosovo. Mr. Serwer, we were strong 
on this in the House. You testified, and have been consistent 
here. Mr. Nash, you seem to concur in that. How do you feel 
about that, Mr. O'Brien?
    Mr. O'Brien. I think first, talent matters. I would pick 
the most talented person regardless of nationality. You 
mentioned Jacques Klein. He's very talented, very experienced.
    Second, U.S. support is essential, and frankly I'm not 
certain why the United States has not managed to find a 
talented candidate, whether American or from elsewhere.
    Senator Voinovich. Now, there seems to be some feeling--
yes, Mr. Nash.
    General Nash. Sir, if I gave you the impression that I was 
endorsing Mr. Serwer's quest for an American leadership in 
Kosovo, I want to correct it.
    Senator Voinovich. OK.
    General Nash. I agree that Jacques Klein is capable, and 
there are many Americans that would be very capable, and 
qualifications are the first criteria, no doubt. At the same 
time, I think that given the role of the European Union, and 
the fact that the Stabilization and Association process is the 
foundation for the eventual integration of Kosovo, in whatever 
form it takes, into Europe, I would prefer a European candidate 
who is qualified to lead UNMIK.
    Senator Voinovich. Well, I've watched two of them now, and 
Mr. Steiner is a pretty strong character, and I guess we 
haven't done the job we were supposed to do, either. You were 
talking about, we're going to send a planner over there now, 
and I talked to the State Department about this when I came 
back in May 2002, and met with Steiner, and he was talking 
about that, and I see he has a strategic plan.
    You need to set some goals, establish a critical path, 
monitor it, get it done, get it done, get it done, and that's 
one of the reasons why we had this hearing, to try to get this 
back up on the radar screen. There are so many other areas 
where the State Department is involved that the tendency is 
maybe just to kind of back off from this, and I think that is a 
real mistake.
    It's the same way with the Stability Pact. I would like you 
to comment about their commitment to the Stability Pact. After 
the war was over they made all kinds of commitments that they 
were going to do something in terms of the Europeans now about 
the stability pact. I would like you to comment on that. How do 
you think they've done on the stability pact, the commitments 
they made?
    Mr. Serwer. I think the day of the stability pact has 
passed. There are a number of good activities it has 
undertaken, but the process of accession to the European Union 
has really replaced it as a political motivating force.
    To go back to the question of leadership in Kosovo, I 
haven't heard any name from the Europeans that would match half 
a dozen names that I can think of from the United States, and I 
think qualifications do count. So does nationality, because we 
have a kind of credibility there, a kind of willingness to get 
results, that the Europeans simply haven't got. This is 
particularly true because the Albanians have to be convinced of 
two things, that they've got to treat minorities, especially 
Serbs, correctly, and that they've got to negotiate with 
Belgrade. I don't think there is any European that would have 
the weight of the right American in arguing those two points.
    Senator Voinovich. And I also think from the perspective of 
the Serbs, I think there is that underlying suspicion of the 
Europeans for some reason, although Solana was really able to 
do a nice job of influencing the new Serbia and Montenegro 
situation. That is something we really need to weigh in on, 
because I think it is really strategic to the future there. You 
get the wrong leader, and things are going to continue to 
linger and linger and linger, and they could explode.
    Comment, any one of you?
    General Nash. Well, first of all, having worked for one of 
the European leaders in Kosovo under the U.N. administration, I 
am less skeptical about their ability to lead the effort. It 
was, in fact, Michael Steiner that created the standards before 
the status initiative, and it was Javier Solana that has 
recently pushed for the direct talks between Pristina and 
Belgrade as a precursor to addressing the status issue.
    I am not sure that an American official as the head of the 
U.N. mission in Kosovo would receive the requisite support from 
the administration to carry out their duties, because I don't 
think that at this time that mission will get the attention 
that is necessary. I would rather see a strategy by the United 
States that includes discussions between Washington and 
Brussels on a variety of issues with respect to the Balkans, 
and that we make our voices heard in that manner and through 
active participation in the NATO missions in both Bosnia and 
Kosovo, and in the Partnership for Peace programs with all the 
countries of the region.
    Senator Voinovich. Well, from what I can understand, the 
NATO thing has worked out pretty well. I was a little bit 
skeptical about changing the guard, but that seems to have 
worked well, and I think Lord Robertson talked about the fact 
that even though there was some question about NATO and so on, 
that today it's more vital than ever before, because they've 
proved they can work together, and I think the fact that they 
did such a good job in Kosovo is a reason why they have been in 
Afghanistan, and they thought ultimately that they might be 
involved in Iraq.
    Would any of you like to comment about the situation in 
Mitrovica, which seems to go nowhere?
    General Nash. Sir, I lived in Mitrovica for 8 months of the 
year 2000. It remains very difficult. It is my judgment that 
all the issues of standards before status come to a head in 
Mitrovica.
    Senator Voinovich. Say that again.
    General Nash. All the issues associated with standards 
before status, i.e., the standards of the respect for law and 
order, the respect for human rights, the respect for minorities 
on both sides of the River Ibar come to play in Mitrovica.
    The fact of the matter is, is that there was a conscious 
decision by one NATO ally, France, that their forces would not 
conduct actions that would allow Albanians to move to the north 
in greater numbers, and would not enforce the rule of law by 
use of the military forces in the northern part of Kosovo, thus 
allowing a parallel system to be established.
    At the same time, south of the river there was little 
effort to bring the Serbian population into the new Kosovo, if 
you will, and the fact of the matter is, in Mitrovica far more 
Albanians lived in the north than Serbs lived in the south, at 
a ratio of approximately 5,000 to 12.
    Mr. O'Brien. I agree with that. General Nash and I worked 
closely while he was in Mitrovica in the year 2000. We couldn't 
find a way to act assertively without provoking the kind of 
demagoguery from Belgrade that might well have swayed the 
election there the wrong way. We knew, though, that the way 
forward was direct confrontation with the thugs, many of them 
subsidized from outside, who were preventing people from moving 
home. I honestly do not know why we have not moved more 
aggressively to clean those people out. That's truly a street-
by-street operation, and I think if we're able to do that you 
may well begin to see some movement there.
    South of the border, it's a classic case of standards 
before status. Here the issue is not so much that an American, 
someone with my flat Nebraska accent, would be good enough to 
persuade people to let Serbs move back. I think it has to come 
from Albanian leaders themselves persuading their compatriots 
that the way forward is not the kind of separatism that we've 
seen in some of those areas. To do that, we need to empower 
those reformers who are willing to speak to their own people in 
that fashion.
    I think standards before status is doing that, and we're 
working with those people. I think any effort to suggest that 
we know what the results of the process should be will undercut 
those reformers just as they are being put to the test.
    Senator Voinovich. Mr. Serwer.
    Mr. Serwer. Mr. Chairman, I would agree with a lot of what 
my colleagues have said. I would only add that we at the U.S. 
Institute of Peace have given two grants to grassroots efforts 
in Mitrovica to initiate and encourage communications between 
younger people on both sides of the river. It is always 
difficult to say what impact this kind of activity has, but at 
the same time I'm sure over the long term that this is what 
really counts, because the level of distrust on both sides of 
the river is enormous, and without making it disappear you 
can't get anything done.
    I also believe that what Jim has just said is terribly 
important: it is important for the Albanians to recognize that 
if they continue not to allow Serbs to live among them, that 
the Serbs will live separately, and that leads rather naturally 
and unhappily, I think, to a partition solution, with which I 
doubt the Albanians will be happy.
    Senator Voinovich. Are any of you familiar with the 
situation in southern Serbia? Covic went down there and granted 
some autonomy to the Albanian majority. Is that still working 
out? I know initially it looked like they empowered the local 
Albanians to take over the control of some of the villages. 
Does anybody have any information on that?
    Mr. Serwer. Mr. Chairman, to tell you the truth, I haven't 
checked recently on this situation, but it's my impression that 
the effort to reintegrate those municipalities and to end the 
insurgency there has worked pretty well, and that it's been a 
sincere undertaking on the part of Belgrade.
    Not all the Albanians are happy with the progress that has 
been made. There are also unhappy Serbs in the area, but I do 
think that this an example where NATO and Belgrade were able to 
work together to end an insurgency and reintegrate an area. We 
are finally seeing the same thing happening as well in 
Macedonia, where Skopje is bringing an end to an insurgency by 
cooperation between Macedonians and Albanians.
    Senator Voinovich. I thought at the time it seemed to me 
that it worked out, it would be a good model for some of the 
other areas, where you've got small ethnic minorities that need 
to be protected.
    Mr. O'Brien. Mr. Chairman, I agree, it is an example of the 
way that there can be strong partnerships between international 
community representatives and reformers. What happened was, 
when the democratic authorities came to power in Belgrade, they 
didn't yet control all of these security services. At that time 
violence was heating up in southern Serbia. The reformers said 
part of the problem is, we don't have full control of these 
people on the ground there, don't let us back in the exclusive 
zone until we're able to change things.
    Then they said, please make it a condition of our getting 
control that we have to make some changes. That will empower us 
to be able to do the right thing. They showed, I think, a great 
deal of courage by granting autonomy and allowing people to 
come back and live within them as a structure. It's frankly the 
way these things ought to work, and I think we should try to 
apply that to the challenges the region is facing today. There 
are differences, of course, but it's that kind of dialog and 
willingness to tailor the solution to the particular problem 
that can see our way through.
    Senator Voinovich. I would like you to comment now on 
Serbia and Montenegro. I was interested--I don't recall which 
one of you indicated that--I believe it was you, Mr. Serwer, 
the fact that now that the new union of Serbia and Montenegro 
has been created lends itself to the fact that if there is some 
separation, it won't be by bloodshed, but that it will be done 
by civilian means.
    There are many people that feel that the situation in 
Serbia following Djindjic's death is still tentative. How do 
you think that is going to unfold in Serbia itself, and do you 
think that there is the possibility in the future that there is 
a loose relationship between Serbia and Montenegro? In other 
words, do you think that this new country works?
    Mr. Serwer. Mr. Chairman, I think the current government in 
Belgrade did a brilliant job after the assassination of the 
Prime Minister. I think it was really an extraordinarily 
tenuous, fragile situation. The imposition of an emergency, and 
the crackdown that ensued, was a good idea. I think the 
crackdown is something that should have occurred a couple of 
years earlier, but it occurred only after the assassination, 
and they have made significant progress.
    I am now quite concerned that progress is flagging. I don't 
see in the leadership, in particular of the Interior Ministry 
and of the Justice Ministry, the same vigor and clarity of 
thought that I see in the Defense Ministry, which is actually a 
Serbia and Montenegro institution.
    It seems to me that they are not carrying this crackdown to 
its logical conclusion. If they had, they would have sent 
everybody, all the indictees, to The Hague. They have said 
quite clearly that there's a link between the nexus of war 
criminals, intelligence services, Milosevic-backers and 
assassins. They have not gone as far as I had some hopes in the 
last couple of months that they would go, and I presume that's 
because there is enormous resistance in Serbia, because the 
security establishment really is infected by forces that will 
have to be gotten rid of before Serbia can really be part of 
Europe.
    Hopefully we can work out a partnership with Belgrade to 
achieve that, but I think we should be clear-eyed about our 
analysis of what has gone on. They have not completed the 
process.
    There is some sign of abuse of the press. We should be 
standing firm for reform of the Justice and Interior 
Ministries, and for upholding the highest of human rights 
standards. Emergencies are allowed, too, but we should not be 
tolerant of an improper crackdown. We should support a proper 
crackdown.
    General Nash. I would just add, sir, that to initiate 
reform, any reform in Serbia requires a great deal of political 
capital, and it sometimes take brute force to make some of the 
arrests and the like, and I really endorse what Jim O'Brien 
talked about earlier with respect to, as you set out a goal, 
you've got to work on specific issues and come up with a 
strategy that reinforces those who want to do the right thing 
and proceed, but as you talk to a wide variety of leaders in 
Serbia, the platter is very full.
    The political capital for change is finite, and the ability 
to do a lot of things at once is not there. They've got to go 
through a process, and that's why Jim's idea of partnership in 
working toward specific goals is so crucial to our strategy.
    Mr. O'Brien. I think the government of Prime Minister 
Zivkovic has been bold and remarkably effective. He's a 
talented, energetic, very honest man, and those qualities have 
been critical to getting him through. Now they face two real 
hurdles, reform of the security services, and cooperation with 
the tribunal, and we need to help them focus on the key steps 
they need to take for both. We need to make sure that one 
doesn't defeat the other, that fear in the security services of 
the tribunal doesn't lead to more assassinations.
    You can do that, but I think you have to do that by being 
actively engaged and working with them on what is possible. The 
secret in any of these exercises when institutions are being 
built is that you have to pick your fights. You have to fight, 
but you have to pick the right fights. We need to be there 
behind them to make sure they know, the reformers know, that 
when they go in there to fight, they're going to have somebody 
with them all the way through, and when they come out the other 
side there's going to be a big enough reward to have justified 
it.
    That's vague, I realize, but I do think we can provide a 
lot of practical guidance on how they could go about picking up 
Mladic and demonstrating that they're doing all they can. I 
think that would be a good process for us to undertake.
    Now, Serbia and Montenegro, we've talked some about road 
maps. On the issues confronting Serbia, I think the agreement 
between Serbia and Montenegro is not so much a road map, but a 
rest area; after a couple of years they're going to take a look 
again. I'm not so sure, I think the theory of the agreement 
seems to be that if they just make the government kind of light 
enough, maybe nobody will really notice it's there, and allow 
it to remain.
    I don't know that that's going to be stable enough, but I 
do believe that they need to seize the next couple of years and 
engage with Europe on the terms of the current arrangement and 
get as far down the road as they can. I think at that stage one 
or the other sides, or both, they'll have some accommodation 
about how they can go forward. I think there are a lot of 
people in Serbia who are now thinking about whether they want 
to be in an arrangement with Montenegro. Three years ago, that 
kind of talk wasn't allowed, and I think in another year or two 
it will be a much different climate.
    I do agree with Dan that this now is something that can be 
handled peacefully, and that's important for everyone to 
remember as they look at border disputes around the region.
    Senator Voinovich. You don't think the coalition is fragile 
and that it could dissipate and somebody else could come in?
    Mr. O'Brien. I think the coalition that won in 2000 is 
effectively over, but I do think the bulk of what was then the 
democratic opposition has rallied around the current government 
for now. I think you will see an emergence of probably three 
factions out of that 2000 period, but that is going to be 
normal politics. What will matter is that when they do put 
together the coalition of leadership, they are able to unite 
behind a mandate that continues the progress of the country 
toward joining Europe.
    That is something that they'll have to decide themselves. 
We'll have to be a part of it. I think Zivkovic's personality 
has been very important over the last month, because people 
respect him as a direct and honest actor, and that has been 
essential.
    Senator Voinovich. We have neglected Macedonia a little 
bit. What's your impression of how that is working out right 
now? The EU has taken over the security, and at least they 
recognize they have to have a security force there to keep the 
stability, but they've got this young Albanian leader and the 
new Prime Minister. How is that working out, in your opinion?
    Mr. Serwer. Mr. Chairman, I think it is so far, so good. 
We've got a government in Macedonia whose coalition partners 
are clearly trying to do the best they can by the Ohrid 
agreement. We at the U.S. Institute of Peace have been in touch 
for sometime with the Albanian leader in that coalition, Ali 
Ahmeti. He will be with us at the Institute on July 1.
    He will appear with the Macedonian Ambassador, who was the 
National Security Advisor during the armed rebellion in 
Macedonia. I have talked with Ahmeti personally, but the jury 
is still out on what he can accomplish. But I think the 
sincerity of the effort to implement that peace agreement and 
to prevent a partition of Macedonia is quite clear. The 
statements of the previous leaders after they left office 
illustrate why it was so difficult when they were in coalition, 
because both of them stated that they would have preferred 
partition.
    I don't think that's true of the current coalition leaders. 
I think they're trying to preserve their country. I think 
they're trying to implement the agreement. Macedonia would have 
problems even if there were no conflict. They have colossal 
economic problems, they have problems with crime and 
corruption. So I can't be 100 percent confident that all of 
this will succeed, but I am reasonably certain that the current 
coalition is trying to make it succeed.
    Senator Voinovich. The last question I would like to ask, 
and thank you, is regarding the issue of organized crime, and 
Mr. Busek has been in to see me. I talked with him, and they're 
moving there, and I would like you to comment on whether or not 
from your perspective, that all of these groups that are out 
there have got their acts together, and whether there's a 
master plan or whether they're still pretty much doing their 
own thing, and they're not as coordinated as they should be, 
because I'm really, genuinely concerned about the organized 
crime network that is there, and it's growing, and as I 
mentioned earlier, they could submerge these people into this 
thing and they will never get out from it.
    You talk about terrorists and terrorism. That part is more 
threatening than terrorism, as far as I'm concerned.
    General Nash. I will start off, sir. First, it is very 
important to understand the nexus between the political power 
and organized crime, and it impacts on all things that take 
place.
    When I lived in Kosovo and worked for the United Nations 
there, a comment I made was that it's very hard to fight 
organized crime with disorganized police. I think your sense 
that many of the initiatives are not necessarily being pulled 
together is a good one, sir, and I think it is an area that 
requires much more attention.
    Senator Voinovich. Let me just ask you this. Part of the 
problem is, though, is the issue of--it's the intelligence, 
it's the rule of law, the infrastructure, the judges. I know 
when I was in Bulgaria I met an FBI guy and they arrested I 
think 61 people for human trafficking. They turned them over to 
the prosecutor, and all the cases disappeared.
    General Nash. You're exactly right, and the issue is, you 
can fix the police, and you can do that in a reasonable amount 
of time. In other words, you can get the cop on the corner, you 
can train them up fairly quickly, but it takes a long time to 
grow a judge, and the lawyers, and the criminal codes and the 
like, so it is a very long process, especially in a place like 
Kosovo, where you're essentially starting over.
    When you have embedded policies within Serbia and you're 
trying to change all of that, that goes back to some of that 
political capital I was talking about earlier, and how long it 
takes to make changes. The best you can do quickly is to try to 
identify the ``big fish'' criminals and get political control 
over the headquarters of the security agencies, the supreme 
court, and try to have some levelers at the top level, and then 
over time build on it.
    But I don't think that the international effort to help all 
of that is put together as well as it could be. The new 
initiative in recent times in Kosovo to convert one of the 
major pillars of the U.N. operations to a law and order pillar 
is extremely wise to put that much emphasis on it, but again, 
the resources, and the growing of all the infrastructure that 
goes into a rule of law is very difficult.
    Senator Voinovich. So you have a dual track. One is to try 
and get all of these various agencies, the OSCE, and SECI, and 
all of that to cooperate, but even if you do all of that, you 
really have to put the pressure on to get the other 
infrastructure in place.
    It seems that where we've made some progress, and I know my 
concern was in terms of Romania and Bulgaria coming into NATO 
that they still had some real corruption problems, and the 
theory was, is that we could make a lot more progress on it for 
them being in than being on the outside, but would you all 
agree that the quicker we can push Partnership for Peace, 
membership in the EU, laying out some standards, the better off 
we would be in terms of getting them to do some of the things 
they need to do?
    And the other question I have is, take for example, for 
Serbia, what kind of incentive would that be? Would it be an 
incentive to try and get in the EU and become involved?
    Mr. Serwer. I think it is an incentive for everybody in the 
region. I think it is important, though, to understand that the 
incentive works before they enter these organizations better 
than it works afterwards. I realize that we can't always insist 
on perfection, but I do think we have to insist on some minimum 
standards.
    The fact is that crime is still more organized than the 
forces of law and order in the Balkans, both at the 
international level and at the national level. One thing the 
United States could do is to make it absolutely clear that we 
have no need of friends in the Balkans who are crooks.
    I think we have sometimes been less than careful about some 
of our friends, because we had little choice. We had bigger 
fish to fry and bigger enemies to worry about. The time has 
come to say plainly to everybody that we have no need of 
friends who are crooks, and that those who are can expect us to 
pursue them.
    Mr. O'Brien. Mr. Chairman, I think the answer is yes. I 
think first it's political will, which takes focus, so the more 
we can focus everyone's efforts where they're going to put 
their scarce political capital to work on the demands of a few 
core institutions, where they know that the reward for doing 
the right thing will be large enough to justify the payment, so 
I think the more focus we put on that, that suggests that maybe 
it's time to wrap some of these technical advisory bodies and 
the ad hoc groups up and put them into some other umbrella 
organization.
    Now, they do great work. SECI, for example, has an 
excellent law enforcement center now in Bucharest which is 
addressing trafficking in women. The stability pact has done 
some very good work, so I think they do technical advice, but 
then you run into the problem that all the technical advice in 
the world isn't enough for the problem they face right now, and 
here I think it's important that we set our priorities 
correctly, and that is, as Bill Nash said, it's the nexus of 
political power and criminality that's what's holding the 
states back, and that's a task it takes every tool you've got 
to respond to.
    We've barely spoken about Bosnia in here. I think in Bosnia 
you have a particularly nasty set of leaders who have converted 
wartime power into political authority, and those parties still 
hold sway, although some of the individuals have changed, and I 
think what is happening, and it happened in bits and pieces 
during the time I was involved in policy, and it's now a focus 
of Paddy Ashdown's time, is that they're trying to use all the 
tools they have to get at those syndicates, to take away their 
money, their control over other people's jobs.
    You use the international tribunal, because a lot of the 
people who are implicated for war crimes probably also are the 
people obstructing progress today, and you then also pursue 
sort of straightforward law enforcement against them, take them 
out of the political bodies, weaken them and isolate them, and 
then over time you're able to take them on.
    It takes a political strategy driven from up above, the 
technical advice that's provided very excellently by a lot of 
these organizations.
    Senator Voinovich. I want to thank you very much for 
coming, and I apologize more of my colleagues aren't here. One 
of the things in the U.S. Senate is that there are many things 
that take--well, I don't need to explain to you--take our time 
on the Foreign Relations Committee, but with all the things 
going on right now, people's minds are in other places.
    I wanted to have this hearing today, and again I appreciate 
Senator Lugar and Senator Allen's allowing us to come together 
today. I think that hopefully this happening may give this a 
little bit more priority over in the State Department, and I'm 
going to be trying to meet here pretty soon with Secretary 
Powell to talk about where they're going and what his overall 
plan is for the area, because I just think we've let this area 
kind of go--it gets back to the speech that I gave a long time 
ago on the Senate floor kind of criticizing former Secretaries 
of State that said something about, we don't have a dog in this 
fight, and the Balkans has been kind of a place where it barks 
and we pay attention, and then it stops barking and we kind of 
neglect it, and it goes on and on, and I think we have this 
just unbelievable opportunity to build--somebody said, $24 
billion we've already invested there, to build on that and not 
let it go, and really see it become part of and integrated into 
Europe.
    I think the other thing that's really inspiring to me is, I 
think the Europeans finally get it. There was a period there 
where they said oh, let it go. I think they know that they 
can't do that, and that's an incentive for them to stay at the 
table and be with us, but it is, I think, very important that 
we continue our leadership there, because as I said, I've 
talked with parliamentarians and other leaders, and they come 
back and say, if you guys leave, it's not going to happen. You 
lend credibility, and you provide leadership, and it's 
important that you're there.
    So thank you very, very much for coming today. The meeting 
is adjourned.
    [Whereupon, at 4:40 p.m., the subcommittee adjourned, to 
reconvene subject to the call of the Chair.]

